Stocks Extend Declines in Early Trade; Yields Rise: Markets Wrap

US stocks fell in early trading as concern over an economic slowdown weighed on risk sentiment. Treasuries declined, sending yields higher across the curve.

The S&P 500 Index dropped for a third day, after the benchmark’s biggest selloff in a month Wednesday. The tech-heavy Nasdaq 100 fell as much as 1.1%. Treasuries retreated with the 10-year yield up 3 basis points, and the euro traded firmer after the head of the European Central Bank reaffirmed her aggressive stance. The dollar weakened.

On the corporate front, Procter & Gamble Co. slid after reporting shrinking sales volume. Alcoa Corp. fell after saying aluminum shipments will be weaker than anticipated this year. Philip Morris International Inc. rose after Jefferies LLC upgraded its view of the stock.

A rally driven by optimism over China’s economic reopening has fizzled as recent data signal a slowdown. Reports from the US this week showed declines in consumer demand and business investment, boosting the probability of a recession in the world’s largest economy. That, however, didn’t deter Federal Reserve officials from reaffirming the need for tighter monetary policy.

Data was mixed Thursday, with new US home construction declined for a fourth-straight month in December. Applications for US unemployment benefits unexpectedly fell last week, sliding to the lowest level since September and underscoring a strong jobs market.

In the US, Wednesday’s releases showed producer prices and retail sales fell, while business equipment production slumped. A decline in factory output wrapped up the weakest quarter for manufacturing since the onset of the pandemic. Even after such a string of poor data, Fed officials repeated calls for more interest-rate hikes.

Key events this week:

• ECB account of its December policy meeting and President Christine Lagarde on a panel in Davos, Thursday
• Fed speakers include Susan Collins and John Williams, Thursday
• Japan CPI, Friday
• China loan prime rates, Friday
• US existing home sales, Friday
• IMF’s Kristalina Georgieva and ECB’s Lagarde speak in Davos, Friday

Here are some of the main market moves:

Stocks

• The S&P 500 fell 0.7% as of 9:53 a.m. New York time
• The Nasdaq 100 fell 0.9%
• The Dow Jones Industrial Average fell 0.6%
• The Stoxx Europe 600 fell 1.4%
• The MSCI World index fell 0.8%

Currencies

• The Bloomberg Dollar Spot Index was little changed
• The euro rose 0.1% to $1.0805
• The British pound was little changed at $1.2343
• The Japanese yen rose 0.3% to 128.46 per dollar

Cryptocurrencies

• Bitcoin was little changed at $20,776.61
• Ether was little changed at $1,528.77

Bonds

• The yield on 10-year Treasuries advanced three basis points to 3.40%
• Germany’s 10-year yield advanced four basis points to 2.06%
• Britain’s 10-year yield was little changed at 3.32%

Commodities

• West Texas Intermediate crude rose 0.6% to $79.94 a barrel
• Gold futures rose 0.6% to $1,918.40 an ounce

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