(Bloomberg) — Stocks slumped around the world as Europe’s biggest cities clamped down to curb the coronavirus amid waning prospects for stimulus and an uneven economic rebound. Treasuries and the dollar rallied.
The S&P 500 fell for a third day as traders also assessed data showing an unexpected surge in jobless claims to the highest since August — a troubling sign for a labor market whose recovery from the pandemic was already slowing. Treasury Secretary Steven Mnuchin told CNBC he will speak to House Speaker Nancy Pelosi Thursday and will tell her he won’t let testing issue stand in a way of achieving a larger stimulus bill.
Commodity, industrial and technology companies led the decline in the American equity benchmark. Morgan Stanley and drugstore giant Walgreens Boots Alliance Inc. rose on stronger-than-expected results.
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Governments are grappling with how to devise targeted strategies that slow the spread of Covid-19 without resorting to the kind of broad national lockdowns which has decimated the economy. Some sectors have done well, like a housing market that’s booming thanks to record-low mortgage rates in the wake of Federal Reserve easing. At the same time, September saw the smallest gain in employment since a jobs rebound began in May. A potential surge in Covid-19 cases during fall threatens more economic damage.
Elsewhere, the U.K’s trade negotiations with the European Union are entering a critical 24 hours, with officials in Brussels growing increasingly uncertain that Boris Johnson will remain at the table. The British prime minister will decide after an EU summit concludes on Friday whether to walk away from the talks based on whether he thinks the bloc is determined to reach a deal or not.
Here are some key events coming up:
- European Central Bank President Christine Lagarde leads off the virtual annual meetings of the International Monetary Fund and the World Bank Group. Through Oct. 18.
These are some of the main moves in markets:
Stocks
- The S&P 500 fell 0.7% as of 10:01 a.m. New York time.
- The Stoxx Europe 600 Index decreased 2.4%.
- The MSCI Asia Pacific Index dipped 1.1%.
Currencies
- The Bloomberg Dollar Spot Index increased 0.5%.
- The euro decreased 0.3% to $1.1707.
- The Japanese yen was little changed at 105.20 per dollar.
Bonds
- The yield on 10-year Treasuries decreased three basis points to 0.70%.
- Germany’s 10-year yield sank five basis points to -0.63%.
- Britain’s 10-year yield sank six basis points to 0.164%.
Commodities
- The Bloomberg Commodity Index decreased 0.6%.
- West Texas Intermediate crude declined 3.5% to $39.59 a barrel.
- Gold weakened 0.3% to $1,895.30 an ounce.
©2020 Bloomberg L.P.
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