U.S. LOSING MOMENTUM
Global equity markets slid for a second day and the dollar eased to its lowest in almost a month on Wednesday as weak U.S. retail sales and a decline in producer prices added to expectations the Federal Reserve will not raise interest rates anytime soon.
Mixed earnings from major U.S. banks, limp inflation figures from China and further declines in commodities also helped dampen the appetite for stocks and the dollar.
U.S. retail sales rose 0.1 percent last month as cheaper gasoline weighed on service station receipts, while sales in August were revised down to unchanged from a prior rise of 0.2 percent, the Commerce Department said.
In a separate report, producer prices fell 0.5 percent last month, the largest drop since January, the Labor Department said. The index fell 1.1 percent in the 12 months through September, its eighth straight 12-month decrease.
The two reports were the latest signs that the U.S. economy was losing momentum in the face of slowing global growth, a strong dollar and lower oil prices. Job growth in the United States braked sharply in the past two months.
"There's some disappointment about the retail number, and the mixed picture in banks," said Rick Meckler, president of hedge fund LibertyView Capital Management LLC in Jersey City, New Jersey.
"We're in that point where we rallied off the low and the next step is less certain. The corporate earnings will probably help decide it, but we're only at the beginning of the reporting period," Meckler said.
MSCI's all-country world index of the equity performance of 46 countries fell 0.38 percent, while the pan-regional FTSEurofirst 300 index in Europe fell 0.72 percent.
Stocks on Wall Street also declined. The Dow Jones industrial average fell 96.11 points, or 0.56 percent, to 16,985.78. The S&P 500 slid 7.6 points, or 0.38 percent, to 1,996.09 and the Nasdaq Composite lost 15.47 points, or 0.32 percent, to 4,781.14.
Among banks, JPMorgan shares fell 2.7 percent to $59.87, a day after the bank reported third-quarter results that fell short of estimates.
Wells Fargo fell 1.0 percent to $51.36, while Bank of America rose 1.0 percent to $15.66 after the bank reported a profit, compared with a year-earlier loss.
The dollar fell to a 3-1/2-week low against a basket of currencies as signs of slowing growth may cause Fed policymakers to abandon plans for a possible rate increase later this year until they see evidence of improving U.S. demand and inflation.
"The dollar is weakening because of the expectations that a Fed rate hike is being pushed further and further out," said Michael Arone, chief investment strategist at State Street Global Advisors' U.S. Intermediary Business in Boston.
The dollar index was last down 0.55 percent at 94.240. Against the yen, the dollar fell 0.53 percent to 119.10 yen, while the euro reached a 3-1/2-week high against the greenback. It was last up 0.58 percent at $1.1442.
Oil eased further below $50 a barrel, falling for a third day on concern a supply glut will persist and demand will slow as economic growth moderates in No. 2 consumer China.
Brent crude was down 24 cents at $49.00 a barrel. Prices have more than halved from June 2014. U.S. crude fell 39 cents to $46.27 a barrel.
U.S. Treasury yields slumped to their lowest in over a week on views the Fed will delay a rate hike until 2016.
Rates futures showed traders anticipate the first Fed rate increase since 2006 would occur at the Federal Open Market Committee meeting in March 2016.
Prices on 10-year Treasuries were up 15/32 to yield 2.0016 percent, after the yield fell to 1.996 earlier.
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