Stocks Slide as Volatility Rises, Dollar Gains: Markets Wrap

  • Equity markets turn lower in afternoon trading, dollar rallies
  • Traders take new Fed language on inflation as dovish for hikes

Three Charts That Indicate a Bullish Trend in Stocks

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U.S. stocks fell, with major benchmarks turning lower in afternoon trading as a bout of volatility shattered calm on equity markets that had surged to fresh highs. The dollar rebounded, while Treasuries fell.

The Nasdaq 100 Index fell the most, with megacap transportation shares joining technology and biotech stocks in an abrupt turnaround that started just after noon in New York. The losses deepened to the biggest in a month as the CBOE Volatility Index rose above 10 for the first time this week. Selling eased in late trading. The Dow Jones Industrial Average edged higher to a fresh record.

The turnaround upended a market that had been trading largely on earnings news, with Facebook Inc. rallying to a record and Verizon Communications Inc. up the most in eight years. Investors punished shares of companies that disappointed, including CA Inc. and XL Group Ltd. 

Amazon.com Inc. fell 3.7 percent while Intel Corp. added 3.4 percent as of 4:05 p.m. in New York after reporting results.

Other assets took cues from economic data and the Fed’s decision, with the dollar rebounding from a selloff Wednesday as data showed U.S. durable-goods orders climbed more than expected. The euro fell for the first time in three days. Treasury 10-year yields rose back above 2.30 percent

Traders have been digesting the latest decision from the U.S. central bank, which said near-term risks to the economic outlook appear balanced, but consumer price growth remains below its target. That signaled policy makers may kick off a reduction in the Fed’s $4.5 trillion balance sheet in September even as they avoid rushing to raise rates. The U.S. reports second-quarter gross domestic product Friday.

Read our Markets Live blog here.

Here are some key events coming up:

  • The U.S. economy probably accelerated in the second quarter to a 2.5 percent annualized pace, fueled by a pickup in consumer spending after a slowdown at the start of the year. Data is Friday.
  • Japan will release inflation, unemployment and retail sales for June the same day, supplying the latest snapshot of the economy and the Bank of Japan’s progress toward reaching 2 percent inflation.
  • Corporate results still ahead this week include Credit Suisse Group AG, Nomura Holdings Inc., Exxon Mobil Corp., Chevron Corp., UBS Group AG, Barclays Plc and BNP Paribas SA.

And here are the main moves in markets: 

Stocks

  • The S&P 500 fell 0.1 percent to 2,475.43 at 4 p.m. in New York, dropping from a record. It fell as much as 0.7 percent before almost recovering into the close. Tech shares led losses with a 0.8 percent slide.
  • Transportation shares declined as United Parcel Service Inc. fell 3.1 percent on earnings. Verizon Communications Inc. rallied, helping the Dow Jones Industrial Average to a gain of 0.4 percent and a fresh record.
  • The Nasdaq 100 lost 0.6 percent rallying back from losses as deep as 1.7 percent. The slump was still the steepest since July 06.
  • The Stoxx Europe 600 Index fell 0.1 percent, with health-care stocks down 1 percent.
  • The U.K.’s FTSE 100 Index dropped 0.1 percent.
  • The MSCI Emerging Market Index rose 0.5 percent to the highest in almost three years.

Currencies

  • The Bloomberg Dollar Spot Index increased 0.4 percent.
  • The euro declined 0.5 percent to $1.1675.
  • The British pound fell 0.4 percent to $1.3065 after rising to the strongest in more than 10 months.
  • The Swiss franc fell 1 percent to $0.9606, the biggest drop in more than 11 weeks.

Bonds

  • The yield on 10-year Treasuries rose two basis points to 2.31 percent.
  • The German 10-year yield fell three basis points after yesterday’s Treasury move.

Commodities

  • West Texas Intermediate settled above $49 a barrel for the first time since early June.
  • Gold gained 0.2 percent to $1,263.51 an ounce, the strongest in more than six weeks.
  • Four of the world’s top gold companies were in full “beats” mode in the second quarter, wringing more value out of their mines amid tepid gold prices.
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