World equities post weekly loss amid economic growth worries
Wall St rallies late, as S&P 500 ekes out gain
NEW YORK, Feb 9, (RTRS): A gauge of global stocks fell for a third consecutive day on Friday amid uncertainty about global economic growth and trade tensions, posting its first weekly drop this year, while the US dollar tallied its strongest week since August.
MSCI’s gauge of stocks across the globe shed 0.35 percent on the day, and dropped for the week following six consecutive weekly increases. Still, Wall Street’s main equity indexes rallied late in the day on Friday, with the benchmark S&P 500 ending marginally positive.
The pan-European STOXX 600 index lost 0.56 percent.
US Treasury yields fell for a fourth straight session. Benchmark US 10-year notes last rose 6/32 in price to yield 2.6339 percent, from 2.654 percent late on Thursday.
US
The benchmark S&P 500 index fell for a third straight day on Friday as skepticism over the United States and China reaching a trade deal before a looming deadline added to concerns over slowing global growth.
As the session wore on, Wall Street’s major indexes regained lost ground, with the Nasdaq little changed. Even so, the S&P 500 and Dow Jones Industrial Average remained firmly in negative territory as investors took profits from recently high-flying stocks.
Shares of S&P 500 energy companies, one of the top-performing sectors so far this year, were down 1.2 percent. Financial shares, also strong performers of late, were the biggest drag among the S&P 500’s major sectors, dropping 0.8 percent as US 10-year Treasury yields fell.
The Dow Jones Industrial Average fell 151.29 points, or 0.6 percent, to 25,018.24, the S&P 500 lost 6.2 points, or 0.23 percent, to 2,699.85 and the Nasdaq Composite dropped 2.66 points, or 0.04 percent, to 7,285.70.
The US corporate earnings outlook has also taken a negative turn. Analysts now expect current-quarter profit to dip 0.1 percent from the year before, not grow the 5.3 percent estimated at the start of the year. Still, the S&P 500 has risen more than 14 percent from 20-month lows in December, spurred by a dovish Federal Reserve and largely positive fourth-quarter earnings.
Of the S&P 500 companies that have reported quarterly results, 71.5 percent have beaten profit estimates, according to IBES data from Refinitiv.
Shares of Coty Inc surged 30.9 percent – the most on the S&P 500 – after the cosmetics maker reported betterthan-expected quarterly results.
Mattel Inc shares gained 21.6 percent after the toymaker posted a surprise
quarterly profit as it benefited from a makeover of its iconic Barbie doll.
Declining issues outnumbered advancing ones on the NYSE by a 1.41to-1 ratio; on Nasdaq, a 1.10-to-1 ratio favored decliners.
The S&P 500 had 17 new 52-week highs and two new lows; the Nasdaq Composite had 30 new highs and 31 new lows.
UK
Following a short-lived recovery, London’s blue-chip shares gave in to pressure on Friday as jitters over the China-US trade dispute fed into fears of a slowdown in the world economy, with bank and energy shares the hardest hit.
The FTSE 100 index ended 0.3 percent lower and the FTSE 250 slipped 0.8 percent, extending losses from the last session when the Bank of England (BoE) slashed its economic growth forecasts amid Brexit uncertainty.
Dragging down the blue-chip bourse were banks and oil stocks, which weakened as crude prices fell over worries of a global economic slowdown. RBS ended lower for a second session after a report that the British government would consider trimming its stake in the bank.
The index still outperformed its European and US peers on Friday, and managed to squeeze out weekly gains as BP’s stellar results had pushed it to a more-than-three month high on Tuesday. The more domestically focused mid-cap index marked its worst week since December as the European Commission and the BoE cut their growth forecasts this week.
Among a handful of gainers were homebuilders, which advanced on hopes that they might be expected to fill the void in house building left by Britain’s local authorities.
Barratt added 1.8 percent, while peers
Berkeley and Persimmon also rose on the main index.
Luxury brand Burberry added 1.3 percent, boosted by French luxury handbag label Hermes’ results and comments that sales momentum in its Chinese stores stayed strong in the fourth quarter.
The British payment company Earthport surged 16 percent as Visa put forward an increased buyout offer, topping a bid from MasterCard.
Investors shunned bookmaker shares as horse racing was postponed in Britain until at least the middle of next week after an outbreak of equine influenza. GVC Holdings, William Hill, 888 Holdings and Playtech all dropped.
Europe
European stocks slipped again on Friday and put an end to five straight weeks of gains as fears about an economic slowdown in the euro zone and a potential full-blown Sino/US trade war added to disappointing earnings from blue chips.
The pan-European STOXX 600 lost 0.5 percent on the day and 0.4 percent on the week. Germany’s exporter-heavy DAX sustained heavy losses among regional bourses and retreated a little over 1 percent.
Among disappointing trading updates was Belgium’s Umicore, which lost 7.3 percent after saying it expected 2019 growth to be hit by subdued demand in cars and consumer electronics, and R&D costs.
Analysts said the company’s lack of quantitative guidance for 2019 weighed on sentiment.
Trade-sensitive autos fell 2.2 percent, extending losses from Thursday, when the sector suffered its biggest one-day drop since the Brexit vote aftermath in June 2016.
Tata Motors warned that Jaguar Land Rover would swing to a loss due to weak sales. That news demand weighed on auto suppliers Valeo and Faurecia, down 2.6 to 3.0 percent.
Adding to the negativity around autos, German car wiring supplier Leoni sank 32 percent after delivering a significant miss to fourth-quarter earnings expectations.
The Swiss business services company DKSH fell 7.5 percent, extending Thursday’s losses after reporting earnings down 11 percent, below estimates.
There were also positive surprises, however. Swedish electronics group Dometic topped the STOXX index with a 15.7 percent jump after giving a positive outlook for 2019 sales growth.
Luxury handbag maker Hermes gained 1.5 percent after it also said sales momentum in its Chinese stores remained stayed strong.
Overall, Europe is on track for its weakest quarter for earnings growth in three years, but investors have been more forgiving to companies with low valuations and expectations at rock bottom.
Asia
Hong Kong stocks ended weaker on Friday as the absence of any positive signs for a resolution in the US-China trade row dented sentiment, but the market pared losses as investors eyed support from A-shares, which will resume trading next week. At the close of trade, the Hang Seng index was down 0.2 percent at 27,946.32 points, while the Hang Seng China Enterprises index fell 0.7 percent. Energy shares shed 1.4 percent as oil markets slipped on concerns over a global economic slowdown. Around the region, MSCI’s Asia ex-Japan stock index was weaker by 0.5 percent, while Japan’s Nikkei index closed down 2 percent.