Tech, oil bear market drop U.S. stocks; bonds rise; markets wrap

By brendan walsh and natasha doff on 11/9/2018

AUSTIN, Texas (Bloomberg) -- U.S. stocks fell amid a fresh batch of weak earnings from the technology sector and concern that a bear market in oil prices may mean trouble for the economy. Treasuries rose.

The S&P 500 pared a second straight weekly advance, and the tech-heavy Nasdaq indexes sank after chipmaker Skyworks plunged after results signaled a slowdown in smartphone demand. West Texas Intermediate crude headed for a 10th straight loss that would be the longest slump on record, sending small cap energy shares tumbling more than 2.5%. Carmakers led declines in the S&P 500 on renewed trade-war concern, while Walt Disney’s strong earnings minimized damage in the Dow Jones Industrial Average.

Mexico’s stock market fell for a second day and its bonds slid with the peso as investors grow concerned about the incoming president’s plans for the economy. Europe’s main equity gauge dropped after disappointing forecasts from Richemont and Thyssenkrupp AG. Treasury yields edged lower after the Federal Reserve on Thursday reiterated its plan for “further gradual” rate increases.

Investors have their eyes open to any signs the economic cycle is peaking. While lower oil prices seem mostly driven by a surge in supply, not a drop in demand, there are more worrisome signs coming out of China. Data there show softer producer-price gains, weak car sales and a disappointing outlook from a top online travel company, helping to reignite lingering concerns about the health of the world’s second-biggest economy.

Asian financial shares performed particularly poorly following news that Beijing plans to set quotas for banks to pump credit into private companies. The offshore yuan held this week’s drop as there was little sign of an end to the U.S.-China trade war in the wake of the midterm elections.

Elsewhere, the pound weakened amid ongoing speculation over a potential Brexit deal. Emerging-market stocks and currencies slid.

The S&P 500 Index fell 1.3% percent as of 12:17 p.m. in New York. It’s up 1.8% in the week. The Nasdaq 100 Index lost 2.1%, while the Russell 2000 fell 2%. The Stoxx Europe 600 Index dipped 0.4%. The Nikkei-225 Stock Average declined 1.15. The MSCI Emerging Market Index sank 1.4%.

The Bloomberg Dollar Spot Index increased 0.3%. The euro declined less than 0.1% to $1.1323. The Mexican peso lost 0.9% to 20.37/dollar. The Japanese yen rose 0.1% to 113.94/dollar.

The yield on 10-year Treasuries declined six basis points to 3.18%. The two-year rate lost four basis points to 2.93%. Germany’s 10-year yield dipped five basis points to 0.41%. Italy’s 10-year yields was up one basis point to 3.40%.

West Texas Intermediate crude dipped 1.1% to $59.96 a barrel, reaching the lowest in almost eight months on its 10th straight decline. Gold futures sank 1.4% to $1,208.40 an ounce, hitting the weakest in a month.

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