World stocks fall for four consecutive days

WORLD stocks were down for the fourth day in a row yesterday, but strong economic growth in Germany boosted the euro to an almost three-week high.

Wall Street was lower on weak oil prices, uncertainty about US tax policy and the economy’s ability to deal with more interest rate hikes. European stocks fell to a two-month low.

US Treasury two-year note yields climbed to a nine-year peak while long-dated debt yields fell, flattening the yield curve flattened for a second consecutive day, while investors braced for a Federal Reserve December rate hike.

In Germany, a 0.8 percent third-quarter growth reading beat forecasts and showed the economy expanding at annualised rates of more than 3 percent.

“It’s been a euro trade today, and it’s stronger against just about everything,” Brad Bechtel, managing director FX at Jefferies in New York, said. “The numbers out of Germany were pretty good last night.”

On Wall Street the defensive utilities sector had the strongest showing while the energy sector was among the weakest.

“You’re at the end of the earnings season, economic data is all distorted because of the hurricanes, I don’t think there is going to be any clear picture until we get a firm yes or no for the tax bill,” Scott Brown, chief economist at Raymond James, Florida.

In late afternoon trade, the Dow Jones industrial average was down 55.29 points, or 0.24 percent, to 23 384.41 points, the Standard & Poor’s 500 lost 7.42 points, or 0.29 percent, to 2 577.42 points and the Nasdaq Composite had dropped 19.04 points, or 0.28 percent, to 6 738.56 points.

The pan-European FTS-Eurofirst 300 index lost 0.57 percent and MSCI’s gauge of stocks across the globe shed 0.18 percent.

Monetary policy was also on traders’ minds with the heads of the US, European, British and Japanese central banks attending a European Central Bank conference in Frankfurt.

The mood in Asia was gloomy after China’s retail sales in industrial output data missed market expectations. MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.4 percent in its third consecutive day of losses. Japan’s Nikkei was unchanged after four sessions of losses.