Indexes fall, pound growing - market wrap

U.S. stocks followed European equities down Tuesday, while the pound soared and U.K. shares tanked after British Prime Minister Theresa May called for surprise early elections to strengthen her hand in Brexit negotiations. Treasuries climbed with gold.

The S&P 500 Index stumbled after its best day since March 1, with shares of health care companies and finance firms leading the decline. Goldman Sachs Group Inc. dropped more than 4 percent, the most in nine months, afterstunning Wall Street with a decline in bond trading revenue.

Across the Atlantic, the FTSE 100 Index lost 2.46 percent, the most since June, while the pound surged against the dollar. May said she was calling the election “with reluctance” but that the U.K. needs stability during Brexit negotiations. Polls show her Conservative Party is more than 20 points ahead of the main opposition.

Earnings will be a key focus for investors over the next couple of weeks, but the number of geopolitical issues facing the market continues to grow.

Global instability also weighed on the markets, as the standoff over North Korea’s nuclear weapons program rumbles on and the French presidential election looms. Two candidates who want to take the country out of the region’s common currency remain in contention in the most unpredictable racein recent history.

Here’s what investors are watching:

- The first round of voting in France is this weekend.
- Final euro area inflation figures for March are out Wednesday.
- Morgan Stanley will publish earnings Wednesday. Akzo Nobel NV also reports then and may outline its plan to counter the $24 billion takeover attempt by PPG Industries Inc.

Here are the main moves in markets:

Indices
- The S&P 500 Index was down 0.54 percent to 2,336.31 at 12:03 p.m. in New York, and the Dow Jones Industrial Average was off 0.77 percent to 20,478.65.
- The Nasdaq 100 Stock Index slipped 0.3 percent, while the Russell 2000 Index lost 0.65 percent.
- The Stoxx Europe 600 Index slumped 1.1 percent, led by commodity producers. The Paris CAC 40 Index dropped 1.6 percent, the most since September.

Currencies
- The Bloomberg Dollar Spot Index fell 0.38 percent.
- The pound was 1.6 percent higher at 1.2768. The euro rose 0.58 percent to $1.0705.
- The Turkish lira increased 0.87 percent, adding to Monday’s gains after Recep Tayyip Erdogan’s referendum victory.

Bonds
- The yield on 10-year Treasuries fell more then seven basis points to 2.1771 percent.
- U.K. 10-year bond yields slipped 3 basis points at 1.014.

Commodities
- Gold rose 0.06 percent to $1,292.80 an ounce.
- West Texas Intermediate oil fell 0.85 percent to $52.20 a barrel, after dropping 1 percent on Monday.
- Iron ore futures continued their slide, dropping more than 5.5 percent since Monday. The raw material for steel-making entered a bear market this month as a procession of analysts, Australia’s government and even some miners said gains were unsustainable.

Source: Bloomberg

Jr Trader Petar Milanov

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