Breaking News
Investing Pro 0
🚨 Our Pro Data Reveals the True Winner of Earnings Season Access Data

Wall Street slides, dollar gains on sterling and yen

Economy Oct 14, 2022 04:56PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A man walks past in front of an electric monitor displaying the Japanese Nikkei share average in Tokyo, Japan October 14, 2022 REUTERS/Issei Kato
 
XAU/USD
+0.11%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US500
-0.58%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DJI
-0.26%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
C
-1.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
JPM
-0.47%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
WFC
-0.32%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Sinéad Carew and Carolyn Cohn

NEW YORK, LONDON (Reuters) - Wall Street stocks closed sharply lower on Friday as investors worried about inflation and rising interest rates while the dollar rose against the yen and sterling after the British prime minister's firing of her finance minister.

Sterling fell sharply after Britain's Liz Truss fired finance chief Kwasi Kwarteng and scrapped parts of their economic package, which had caused an uproar in financial markets. The dollar also kept rising against Japan's beleaguered yen, hitting a fresh 32-year peak of 148.86.[FRX/]

Oil settled sharply lower as recession concerns translated to worries about demand. [O/R]

In U.S. Treasuries, benchmark 10-year yields gained some ground after data showed U.S. retail sales were unexpectedly flat in September as high inflation crimped demand and investors continued to bet on aggressive Federal Reserve rate hikes. [US/]

The U.S. third quarter earnings season started on a positive note with shares of JPMorgan Chase & Co (NYSE:JPM), Wells Fargo (NYSE:WFC) & Co and Citigroup Inc (NYSE:C) rising after their reports.

But as the session wore on, equity declines deepened with oil prices pushing energy stocks down sharply and consumer stocks falling sharply. Buyers were reluctant to step in after Thursday's big rally, according to Mona Mahajan, senior investment strategist at Edward Jones.

While traders stepped in to cover bearish bets on Thursday despite higher-than-expected inflation data, Mahajan noted that stocks headed lower on Friday after a University of Michigan survey showed rising inflation expectations.

"We're back to looking at inflation data very carefully. The Fed does watch inflation expectations. They certainly don't want inflation expectations to become ingrained in consumer sentiment," said Mahajan, who also noted signs of fear in the market as the CBOE Volatility index remained above 30.

Even though Wall Street had rallied on Thursday despite soaring inflation data, investors appeared to return their focus to the data on Friday, according to Anthony Saglimbene, chief market strategist at Ameriprise Financial (NYSE:AMP).

"The narrative that we’ve seen peak inflation is not evident yet and that’s depressing the market," said Saglimbene, also pointing to the UK news.

"Yesterday there was speculation that Truss and the UK government would reverse some of those fiscal plans and they did. Now the markets are selling on the news and the news that we have right now isn’t great.

The Dow Jones Industrial Average fell 403.89 points, or 1.34%, to 29,634.83, the S&P 500 lost 86.84 points, or 2.37%, to 3,583.07 and the Nasdaq Composite dropped 327.76 points, or 3.08%, to 10,321.39.

The pan-European STOXX 600 index rose 0.56% and MSCI's gauge of stocks across the globe shed 1.30%.

Emerging market stocks rose 1.03% as Latin American currencies fell due to the dollar strength.

Sterling was last trading at $1.1171, down 1.39%, after falling as low as $1.1149.

Friday was expected to be the last day of the Bank of England's bond buying program set up to stabilize government bond, or gilt markets, after investors were spooked by unfunded tax cuts announced in a "mini-budget" last month.

Investors appeared to have little confidence in the prime minister's position or the likelihood that her decisions on Friday could restore Britain's credibility in financial markets.

The euro was down 0.55% at $0.9719 while the Japanese yen weakened 0.99% at 148.68 per dollar.

Japanese Finance Minister Shunichi Suzuki on Thursday reiterated the government's readiness to take steps against excessive currency volatility.

In U.S. Treasuries, yields edged higher as investors continued to digest Thursday's red-hot U.S. inflation print and contemplated interest rates staying higher for longer with the Fed's policy rate potential moving closer to 5%.

Benchmark 10-year note yields were up 7.1 basis points to 4.025%, from 3.954% late on Thursday.

Oil prices landed down more than 3% as fears of a global recession and weak oil demand, especially in China, outweighed support from a large cut to the OPEC+ supply target.

U.S. crude settled down 3.93% at $85.61 per barrel and Brent finished at $91.63, down 3.1% on the day.

Gold prices tumbled 1.4% as the dollar gained while silver was down 3.3% at $18.24 per ounce, in its eighth daily decline in a row.

Wall Street slides, dollar gains on sterling and yen
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email