NEW YORK – United States stocks staggered back from a rout that took the S&P 500 Index into a correction, though major average remained firmly lower for the day. Treasuries and gold remained higher amid demand for havens.
The S&P 500 cut a loss that approached 3 percent by more than half, though it remains on track for the worst month in eight years. The tech-heavy Nasdaq indexes bore the brunt of selling after Amazon.com and Alphabet sank on disappointing results. The Chicago Board Options Exchange Volatility Index shows price swings are the greatest since February. Investors got a brief reprise after a report showed the U.S. economy expanded at a high-than-forecast 3.5 percent pace last quarter.
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“At this point, we’re going to go through a corrective rotation,” said Peter Sorrentino, chief investment officer at Comerica Asset Management. “I don’t think there’s any group of stocks that’s going to pull us out of this. October is going to be a brutal month – we will have to live through this rotation.”
The rout that had largely been contained to equities spilled into other assets Friday. Gold spiked toward the highest since July and the rally in Treasuries pushed the two-year note yield down 10 basis points this week. Yields on benchmark 10-year notes have slumped 11 basis points, the biggest weekly decline since May.
In Europe, the Stoxx Europe 600 Index continued its retreat, heading for the biggest monthly drop in three years. Asian shares sank deeper into a bear market earlier. Core European bonds gained as the risk-off mood spread.
Markets remain on edge after more than $6.7 trillion was lost from global equities’ value since late September, as lofty expectations for earnings were tested amid heightened trade tensions and tightening financial conditions.
Meanwhile, West Texas oil dipped back below $67 a barrel and copper headed to close the week lower. The offshore yuan extended this week’s slide to trade at the weakest since January 2017, while the yen pushed higher. Emerging-market stocks tumbled to the lowest in 19 months, heading for a fifth straight week of losses.
These are the main moves in markets:
Stocks
The S&P 500 dropped 1.1 percent as of 12:42 p.m. in New York, while the Dow Jones Industrial Average fell 0.8 percent and the Nasdaq Composite Index declined 1.3 percent. The Stoxx Europe 600 dropped 1.5 percent. The U.K.’s FTSE 100 slumped 1.8 percent. Germany’s DAX Index fell 1.8 percent. The MSCI Emerging Market Index eased 1.3 percent. The MSCI Asia Pacific Index slumped 0.3 percent.
Currencies
The Bloomberg Dollar Spot Index fell 0.1 percent, after reaching a 17-month high. The euro was steady at $1.1376. The British pound was little changed at $1.2822. The Japanese yen strengthened 0.9 percent to 111.45 per dollar.
Bonds
The yield on 10-year Treasuries fell five basis points to 3.06 percent, while the two-year note yield eased six basis points to 2.79 percent. Germany’s 10-year yield fell six basis points to 0.34 percent.
Commodities
West Texas Intermediate crude fell 0.2 percent to $67.22 a barrel. Gold rose. 0.8 percent at $1,242.26 an ounce.
Sarah Ponczek and Vildana Hajric are reporters for Bloomberg News.
