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Markets

Stocks extend sell-off on growth and Brexit worries

Dow drops over 460 points led by banks and energy sectors

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., Dec.10.   © Reuters

NEW YORK (Reuters) -- A gauge of global equities stumbled on Monday, putting it on track for its fifth straight daily decline, as losses in Europe and Asia extended to Wall Street on new signs the U.S.-China trade spat was impacting world economic growth.

Further denting sentiment was confusion stemming from the vote by Britain's parliament's on Prime Minister Theresa May's Brexit deal after May abruptly pulled it on Monday.

Sluggish data from the world's largest economies including the U.S, China, Japan and Germany have disappointed investors in recent days, and skepticism has grown that Washington and Beijing will be able to reach a trade deal before a 90-day window expires.

China reported far weaker-than-expected November exports and imports, showing slower global and domestic demand and raising the possibility authorities will take more measures to keep the country's growth rate from slipping too much.

Each of the major U.S. indexes were lower, with Apple, off nearly 2 percent, weighing heavily. Chip supplier Qualcomm Inc said it had won a preliminary order from a Chinese court banning the importation and sale of several iPhone models in China due to patent violations.

On a sector basis, both financials and energy were down at least 3 percent.

The Dow Jones Industrial Average fell 469.09 points, or 1.92 percent, to 23,919.86, the S&P 500 lost 43.72 points, or 1.66 percent, to 2,589.36 and the Nasdaq Composite dropped 78.14 points, or 1.12 percent, to 6,891.12.

Sterling was last trading at $1.2536, down 1.49 percent on the day. The dollar index rose 0.62 percent.

"It's definitely weakening the pound," said Chuck Tomes, associate portfolio manager at Manulife Asset Management in Boston. "It's casting more uncertainty about a Brexit vote."

MSCI's all-country index was on pace for its fifth straight decline and is down nearly 7 percent over that period, its worst five-day stretch since February. The pan-European STOXX 600 index lost 1.72 percent and MSCI's gauge of stocks across the globe shed 1.79 percent.

Last week's arrest of the chief financial officer of Chinese smartphone maker Huawei for extradition to the United States was seen as putting up another hurdle to the resolution of a trade war between the world's two biggest economies.

U.S. Trade Representative Robert Lighthizer said Sunday there was a "hard deadline" to the 90-day trade ceasefire and without a successful end to talks by March 1, Washington would impose new tariffs on Chinese goods.

In another sign of a global slowdown, Japan posted the worst contraction in over four years in the third quarter as uncertainty over global demand and trade saw companies slashing capital spending.

The signs of weakening have taken a heavy toll on oil prices, which have slumped around 30 percent since early October. U.S. crude fell 2.15 percent to $51.48 per barrel and Brent was last at $60.80, down 1.41 percent on the day.

Benchmark 10-year notes last rose 5/32 in price to yield 2.8324 percent, from 2.85 percent late on Friday.

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