Tuesday, September 27, 2022

The Dow has lost 2.8 percent in three weeks

Markets around the world were lower again on Sunday and early Monday as investors fretted over lower-than-expected corporate earnings from companies like Apple and Microsoft, an increase in U.S. Treasury yields and fears over rising inflation.

A plunge in Facebook shares sent the Dow Jones industrial average down more than 660 points. The Nasdaq, where technology companies like Apple and Microsoft are big shareholders, tumbled.

Those declines came as Apple and Microsoft posted earnings that didn’t match analysts’ expectations. Markets have been tumbling for three weeks now, more than a month after the Trump administration slapped steep tariffs on aluminum and steel imports. Investors worry that a lot of that steel is going into products like cars, planes and trucks, and that those goods will increase prices for Americans.

Investors worry that rising global interest rates could cause inflation to spike and push the Federal Reserve to raise interest rates faster than normal. Higher rates tend to drag on stocks as they reduce demand for stocks.

In Europe, Germany’s DAX declined 2.1 percent, France’s CAC 40 fell 1.6 percent and the FTSE 100 index of leading British shares lost 0.5 percent.

KEEPING SCORE: In Asia, markets rose overnight before the new selling began in Europe. Japan’s Nikkei 225 rose 0.7 percent to close at 21,801.98. Hong Kong’s Hang Seng rose 0.1 percent to 29,177.19 and the Shanghai Composite in mainland China gained 0.7 percent to 3,241.86. South Korea’s Kospi gained 0.7 percent to 2,371.40. Australia’s S&P/ASX 200 rose 0.2 percent to 6,101.10.

TICK MARKETS: The Dow Jones industrial average fell 2.8 percent, its biggest decline since September 2016. The Standard & Poor’s 500 index dropped 2.6 percent. The Nasdaq fell 2.8 percent.

U.S. DATA: U.S. markets will be closed Monday for the Presidents Day holiday.

DATA FEUD: Investors will focus on industrial production and consumer prices in the United States, while a round of January trade figures for Europe will be out at the end of the week. Europe will also see a string of data releases in coming days.

ANALYST’S TAKE: Paul Christopher, chief international market strategist at Wells Fargo Investment Institute, said “tensions are building in global markets,” with the pain felt in Asian markets spilling over into European and U.S. exchanges.

CURRENCIES: The dollar fell to 110.42 yen from 110.68 yen in late trading Friday. The euro edged up to $1.1317 from $1.1311.

ENERGY: Benchmark U.S. crude added 3 cents to $61.68 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 16 cents on Friday to close at $61.64. Brent crude, used to price international oils, rose 10 cents to $64.46 a barrel in London. It shed 18 cents the previous session to $64.43.

BONDS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.85 percent from 2.86 percent.


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