NEW YORK (Reuters) - Global equity markets and commodities dropped on Monday, weighed by concerns over the economic health of China and other big emerging markets in a week filled with key economic data.
An 8.8 percent drop in Chinese industrial firms’ profits and a plunge of nearly 30 percent in miner Glencore’s London-traded shares ignited the latest round of worry, sending copper back below $5,000 a tonne.
“The Chinese industrial profit report for August was dramatically down; that just gives the market another reason to sell,” said Richard Weeks, managing director at HighTower Advisors in Vienna, Virginia.
“Fundamentally there’s no compelling reason for longer-term investors to get more bold.”
Market participants have already been cautious ahead of a week of key economic data, including euro zone inflation on Wednesday, Chinese industrial and service sector PMIs on Thursday and U.S. jobs figures on Friday.
In addition, a raft of U.S. Federal Reserve officials are scheduled to speak, including Chair Janet Yellen on Wednesday.
New York Federal Reserve President William Dudley added to expectations of an early rate increase, suggesting the central bank could pull the trigger as soon as in October. [
The Dow Jones industrial average fell 265.27 points, or 1.63 percent, to 16,049.4, the S&P 500 lost 40.97 points, or 2.12 percent, to 1,890.37 and the Nasdaq Composite dropped 118.14 points, or 2.52 percent, to 4,568.36.
The S&P 500 was on track for its biggest daily percentage drop since Sept. 1.
Along with data that may give a clearer reading of China’s economic health, Friday’s U.S. non-farm payrolls release will be watched for clues on whether rates might rise this year.
The Fed recently delayed a widely anticipated rate hike on concerns over sluggish Chinese growth and market volatility.
Data on Monday showed U.S. consumer spending grew briskly in August and a key measure of inflation firmed a bit, signs of strength in America’s domestic economy that could lead the Federal Reserve to tighten policy despite weakness abroad.
The flash reading of annual euro zone inflation is due on Wednesday, with a Reuters poll forecasting a zero reading in September. A slip into negative territory would fuel speculation about more European Central Bank stimulus, six months after the euro zone’s central bank began a massive asset-purchase program.
The FTSEuroFirst index of 300 leading European shares closed down 2.2 percent while MSCI’s all-country world index declined 1.8 percent.
The U.S. 10-year Treasury note rose 19/32 in price to yield 2.1002 percent as global concerns reduced investor appetite for risk and increased demand for safe-haven U.S. bonds.
Commodities markets were also pressured, with U.S. crude oil futures off 2.8 percent to $44.40 a barrel while Brent crude lost 2.6 percent to $47.33 a barrel as worries about the global economy outweighed an increase in U.S. investors’ crude holdings.
Emerging markets remained a key pressure point due to fears that U.S. interest rates could soon start heading higher even as global growth is tepid and commodities markets battered. MSCI’s emerging market index fell 1.1 percent.
Additional reporting by Sinead Carew; Editing by Nick Zieminski and Bernadette Baum