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.

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This information has been prepared by IG, a trading name of IG Markets Limited and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. 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. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in line with their foreign investment allowance and may not use credit or debit cards to fund their international account.