Stocks buckle, dollar slips as investors mull Fed action
By Herbert Lash NEW YORK (Reuters) - Global equity markets slid and the dollar eased on Thursday after the Federal Reserve reminded investors of an economy whose poor health was reinforced by data showing persistently high claims for U.S. unemployment benefits.
By Herbert Lash
NEW YORK (Reuters) - Global equity markets slid and the dollar eased on Thursday after the Federal Reserve reminded investors of an economy whose poor health was reinforced by data showing persistently high claims for U.S. unemployment benefits.
Fed Chair Jerome Powell on Wednesday made clear the U.S. labor market has a long way to go to meet the central bank's maximum employment goal and that its tools to achieve that were limited - dashing hopes of further stimulus.
The safe-haven yen hit a seven-week high against the dollar and a 1-1/2-month peak versus the euro as euro zone government bond yields dipped after the Bank of England said it was looking at possibly cutting interest rates to below zero.
Wall Street's main indexes tumbled as the technology sector and related stocks slid further, with Apple Inc
The number of Americans filing new claims for unemployment benefits fell less than expected last week and applications for the prior period were revised up, suggesting the labor market recovery had shifted into low gear amid fading fiscal stimulus. [nL1N2GD24N}
The Fed is doing all it can without appearing to be in panic mode, said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Investors face few alternatives other than stocks so some are taking profits ahead of the U.S. presidential election in November from this year's unexpected rally after the coronavirus pandemic pushed economies into recession, he said.
"The Fed has been the most predictable part of the U.S. government. They did exactly what they told you they were going to do, they've been doing exactly what they said they were going to do now for well over a year," Meckler said.
"If there's more stimulation to come it's going to have to come from Congress and the president, and on that front we seem probably stymied until the election."
MSCI's global benchmark for equity markets <.MIWD00000PUS> fell 1.05% to 568.94, while its emerging markets index <.MSCIEF> fell 0.93%.
In Europe, the broad FTSEurofirst 300 index <.FTEU3> closed down 0.52% at 1,438.61 and on Wall Street the Dow Jones Industrial Average <.DJI> fell 0.87%, the S&P 500 <.SPX> lost 1.31% and the Nasdaq Composite <.IXIC> dropped 1.8%.
Banks reeled from the prospect of near-zero interest rates for a prolonged period, with the European banking index <.SX7P> falling 1.6% while the S&P 500 financials index <.SPSY> slipped 1.27%.
Overnight in Asia, MSCI's broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> lost 1% after five straight days of gains while the Nikkei in Japan <.N225> and KOPSI in South Korea <.KS11> shed 0.6%. and 1.2%, respectively. [.T]
The stronger dollar inflicted some damage in emerging markets too. Turkey's battered lira hit its latest record low
The dollar index <=USD> fell 0.243%, with the euro
The Japanese yen
Oil rose 2% as the Organization of the Petroleum Exporting Countries and its allies said it would crack down on countries that fail to comply with output cuts and that it planned an extraordinary meeting in October if crude prices weaken further.
Brent crude futures
Spot gold prices
(Reporting by Herbert Lash; Editing by Steve Orlofsky and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.