Scoreboard: Wall Street tumble

Wall Street dived again, reversing the gains made on Wednesday, while oil prices plumbed depths not seen in more than two years.

In the US, new claims for unemployment insurance fell by 1,000 in the latest week to 287,000, below forecasts for a result near 294,000. Wholesale sales fell 0.7 per cent in August (forecast 0.7 per cent) while inventories rose by 0.3 per cent (forecast 0.3 per cent gain).

European shares eased on Thursday as investors digested falling oil prices, weaker global economic growth, fears on the Ebola virus and uncertainty about when the Federal Reserve was likely to lift interest rates. Leading German economic institutes have reduced growth forecasts, tipping the German economy to grow by 1.3 per cent in 2014 and 1.2 per cent in 2015. The FTSEurofirst 300 index fell by 0.4 per cent while the UK FTSE lost 0.8 per cent and the German Dax rose by 0.1 per cent. Australia's major miners were firmer in London trade with shares in BHP Billiton up by 0.5 per cent while Rio Tinto lifted by 2.1 per cent.

US sharemarkets slumped on Thursday on continued uncertainty about the future path of interest rates. Lower oil prices weighed on energy stocks while investors worried about the German economy and potential spread of the Ebola virus. After being down 345 points, the Dow Jones closed lower by 335 points or 2.0 per cent with the S&P 500 index down by 2.1 per cent while the Nasdaq lost 90 points or 2.0 per cent.

US treasury prices were little changed on Thursday despite large declines on US equity markets. US Treasury sold $13 billion in 30-year bonds on Thursday. US two-year yields were down 1 point to 0.452 per cent while US 10-year yields were up 1 point to 2.336 per cent.

Major currencies were generally softer against the greenback over European and US sessions on Thursday. The Euro fell from highs near $US1.2790 to lows near $US1.2665, ending US trade near $US1.2685. The Aussie dollar fell from highs near US88.95c to lows around US87.60c, ending the US session near US87.85c. And the Japanese yen held between ¥107.50 per US dollar and ¥108.16, ending US trade near ¥107.88. 

World oil prices slumped again on Thursday as investors fretted about softening European economic growth in the face of plentiful global supplies of crude. Data showed that German exports fell by 5.8 per cent in August, the biggest fall in over 5 years. Brent crude fell to a 27-month low, down by $US1.33 or 1.5 per cent to $US90.05 a barrel while the US Nymex crude price fell by $US1.54 or 1.8 per cent a barrel to $US85.77 a barrel.

Base metal prices rose by up to 1.3 per cent on Thursday with copper leading the way although tin rose by only 0.2 per cent. Gold rose with the Comex gold futures quote up by $US19.30 an ounce or 1.6 per cent to $US1,225.30 per ounce. Iron ore was down by US30c on Thursday or 0.4 per cent to $US79.50 a tonne.

Ahead: In Australia, housing finance data is released. In the US, data on import and export prices are released.

InvestSMART FORUM: Come and meet the team

We're loading up the van and going on tour from April to June, with events on the NSW central & north coast, the QLD mid-north coast and in Perth, Adelaide, Melbourne, Sydney and Canberra. Come and meet the team and take home simple strategies that you can use to build an investment portfolio to weather any storm. Book your spot here.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free

Related Articles