Steep stock slide continues

Shares on Wall Street tumbled yesterday and it’s happened again today, with falls of more than 1% for the three leading US stock indices.

Severe weakness in emerging markets is spooking investors on Wall Street, with today seeing the second consecutive steep sell-off. By early afternoon in New York, the Dow Jones was down 1.15% or 186 points, having been down more than 200 points earlier in the day, while the S&P 500 lost 1.39% and the NASDAQ 100 tumbled 1.3%.

The S&P 500 is now down 2.5% on the year so far, with earnings not doing enough to maintain the lofty prices attained in 2013.

Dow component Procter & Gamble is one of today’s few notable risers, gaining 2.7% after reporting better-than-expected earnings. Even with P&G it’s a mixed picture though, failing to meet estimates with its revenue, and earnings failing to match the equivalent period from a year earlier.

Microsoft is another stock to have made gains, rising 2.9%; the software and services company reported forecast-beating earnings after the market last night, boosted by strong sales of its Xbox platform and growth in its cloud services.

Worries over a decline in China’s growth, sparked by a decline in its PMI manufacturing mid-week, have coincided with considerable weakening of emerging market currencies. Intervention by the Turkish central bank has failed to arrest a steep slide in the Turkish lira, while the Argentinian peso dropped 11% yesterday against the US dollar. The US dollar has gained 0.95% against the South African rand today, and risen to its strongest level against the Mexican peso in a year and a half.

IGA, may distribute information/research produced by its respective foreign marketing partners within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

See important Research Disclaimer.