By Caroline Valetkevitch
NEW YORK (Reuters) – Global equity markets dropped on Friday and copper fell to a six-year low as weaker-than-expected data from China and the euro zone exacerbated concerns over global economic growth.
Brent and U.S. crude oil futures settled at their lowest since March and registered their fourth straight weekly decline.
Energy and materials shares weighed on U.S. stocks along with biotechs, which were dragged down by a disappointing forecast from Biogen (BIIB.O). The S&P 500 and the Nasdaq posted their biggest weekly declines since March.
“You got underwhelming revenue growth on balance and then you layer on top of that concern over a global economic slowdown, that becomes self-fulfilling,” Art Hogan, chief market strategist at Wunderlich Securities in New York, said of the weak state of the stock market.
Copper slumped to its lowest in six years, with three-month copper on the LME (CMCU3) hitting $ 5,191.50 a tonne, its cheapest since July 2009, before paring losses.
A survey showed Chinese manufacturing contracted by the most in 15 months in July as orders shrank. Worries over demand increased in the world’s biggest metals consumer as stockpiles mounted.
The flash Caixin/Markit China Manufacturing Purchasing Managers’ Index (PMI) showed activity contracted for a fifth straight month, and faster than economists polled by Reuters had estimated. Euro zone business activity also started the second half of the year on less secure footing than expected, hit by Greece’s near-bankruptcy. Markit’s flash euro zone PMI fell.
MSCI’s all-country equities world index was down 1 percent, while European shares (.FTEU3) closed down 0.9 percent.
The Dow Jones industrial average (.DJI) fell 163.39 points, or 0.92 percent, to 17,568.53, the S&P 500 (.SPX) lost 22.5 points, or 1.07 percent, to 2,079.65 and the Nasdaq Composite (.IXIC) dropped 57.78 points, or 1.12 percent, to 5,088.63.
For the week, the Dow fell 2.9 percent while the S&P 500 lost 2.2 percent and the Nasdaq declined 2.3 percent.
The S&P health care index (.SPXHC) fell 2.5 percent and Biogen’s shares lost 22.1 percent to close at $ 300.03.
Adding to the bearish tone for U.S. stocks, Democratic presidential candidate Hillary Clinton is expected to propose nearly doubling the U.S. capital gains tax rate on short-term investments, according to a Wall Street Journal report.
Amazon.com (AMZN.O) shares jumped to a record high of $ 580.57, a day after the online retailer posted an unexpected quarterly profit. The shares ended up 9.8 percent at $ 529.42.
Among other gainers, British telecom firm Vodafone (VOD.L) rose after results showed improvements across major markets in Germany and Britain.
In the energy market, Brent September crude (LCOc1) fell 65 cents to settle at $ 54.62 a barrel, the lowest close since March 19, while U.S. crude for September delivery (CLc1) slipped 31 cents to settle at $ 48.14, its lowest settlement since March 31. An increase in the number of U.S. drilling rigs added pressure.
“Crude was already lower on concerns about the global economy and the rig count added to the negativity,” said Phil Flynn, analyst at Price Futures Group in Chicago.
U.S. Treasury debt prices drifted higher as investors sought safety in government bonds after a softer-than-expected U.S. housing report and amid a persistent downtrend in commodities and weakness on Wall Street. U.S. 30-year bond yields, which move inversely to prices, fell to a seven-week low, while U.S. 10-year yields slid to a two-week trough.
Benchmark 10-year Treasury notes
U.S. DOLLAR EDGES UP, AUSSIE DOWN
The U.S. dollar edged up against most other major currencies on the data that pointed to sluggish overseas economic growth, while the Australian dollar (AUD=) sagged to a six-year low.
In late U.S. trading, the dollar index (.DXY) was up 0.2 percent.
The Aussie dollar, often used as a liquid proxy for China trades, fell to a six-year low. The recent decline in a wide range of commodities, including oil, has weighed on currencies such as the Canadian (CAD=) and Australian dollars.
Gold turned higher after sliding more than 1 percent to its lowest since early 2010. Spot gold (XAU=) hit its lowest since February 2010 at $ 1,077.00 an ounce but was last up 0.5 percent at $ 1,096.29.
(Additional reporting by Rodrigo Campos and Robert Gibbons in New York, Saikat Chatterjee in Hong Kong and Patrick Graham and John Geddie in London; Editing by Meredith Mazzilli and James Dalgleish)