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US stocks were put under pressure on Thursday following a series of resignations from British ministers following a draft agreement on Brexit that shook sterling and European markets.
The S & P 500 index lost 0.5%, after concerns raised by the technology sector and the slowdown in global economic growth, which led the index to a fifth consecutive session of decline on Wednesday .
The Dow Jones Industrial Average index yielded 117 points, or 0.5%, to 24955, while the Nasdaq Composite index lost 0.1%.
Global equities had already been volatile this week due to strong oil price fluctuations, concerns about the technology sector and growing doubts about the health of the global economy.
The Stoxx Europe 600 was down 1.2% in afternoon trading. The losses came after the resignation of six government ministers, including Brexit Secretary Dominic Raab, one of the architects of the Brexit agreement, announcing the turmoil that Prime Minister Theresa May planned to leave the country.
"It was always difficult for Premier Theresa May to get [her Brexit deal] through the Parliament, but this resignation further complicates things and immediately places its future in consideration, "said Shamik Dhar, chief chief economist at BNY Mellon Investment Management. "The chances of a non-agreement have slightly increased," he said.
The pound was down 1.5% to $ 1.2797, more than a reversal of course late Wednesday night when Ms. May got cabinet approval for her agreement on Brexit.
"Today is a precursor" to the eventual market reaction in case of Brexit without agreement, said Dhar. "These are mainly British assets and to some extent affected by the eurozone," he said, noting that the impact on the global economy seemed rather limited.
During the US trading on Thursday, shares of the Dow Walmart component rose 0.3%, after the world's largest retailer recorded an increase in quarterly sales in anticipation of the holiday season. busy. J.C. Penney's shares tumbled 13% after third-quarter comparable store sales were below analysts' estimates.
Cisco Systems shares rose 4% after the technology giant recorded its fourth consecutive quarterly gain on Wednesday night, helping ease the recent market nervousness over the strength of the technology sector.
Separate data showed an increase in consumer spending in October. Retail sales rebounded last month, up 0.8% from September to $ 511.5 billion (seasonally adjusted data), the Commerce Department said Thursday.
The compromise agreement between the UK and the EU, its main trading partner, has yet to be approved by the country's parliament.
Photo:
Associated press
The disappointing economic figures have also clouded the outlook for the global economy. Federal Reserve Chairman Jerome Powell said Wednesday night that the US central bank is watching a slowdown in global growth.
"You're still seeing solid growth, but you're seeing more and more signs of slowing down. And it's worrying, he says.
Mr Powell did not say that one of the challenges was strong enough or surprising enough to change the Fed's policy.
In commodities, the price of oil in the United States rose 0.2% to 56.41 dollars per barrel. The global benchmark, Brent, rose 0.7% to 66.58 dollars a barrel on Thursday after falling 6.6% on Tuesday in a volatile trading.
"When you have oil, go down [so much] in a week, this will create significant volatility, "said Mark Esposito, managing director of Esposito Securities.
Elsewhere, Asian stocks were generally higher outside of Japan, with the media reporting that China had made a public takeover bid in the United States. Hong Kong's Hang Seng rose 1.7%, the Shanghai Composite Index 1.4% and Korea's Kospi 1%. Japan's Nikkei Stock Average slipped 0.2%.
– Jessica Menton contributed to this article.
Write to Riva Gold at [email protected]
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