Dollar hits 16-month high; tech woes crunch stocks
The U.S. dollar surged on Monday to its highest point in 16 months against a basket of currencies and world stocks fell broadly amid concern about political risks in Europe, while U.S. and European technology shares were hammered.
Major U.S. stock indexes dropped more than 1 percent, with the tech-heavy Nasdaq slumping over 2 percent. Indexes were weighed down by a 4.3-percent slump in index heavyweight Apple
In Europe, fears about a no-deal Brexit and a growing rift over Italy`s budget put pressure on the euro and the pound. The dollar also gained strength as investors built bets on a U.S. Federal Reserve interest rate increase next month.
"Rising global uncertainty and a widening U.S. yield differential with other economies provide support, but an elevated valuation may constrain further gains," Richard Turnill, global chief investment strategist with BlackRock, wrote in a research note.
The dollar index <.dxy> rose 0.62 percent, with the euro
The Dow Jones Industrial Average <.dji> fell 493.57 points, or 1.9 percent, to 25,495.73, the S&P 500 <.spx> lost 44.93 points, or 1.62 percent, to 2,736.08 and the Nasdaq Composite <.ixic> dropped 183.14 points, or 2.47 percent, to 7,223.76.
Apple shares fell as the main supplier for its Face-ID technology, Lumentum Holdings Inc
The S&P 500 technology sector <.splrct>, a main driver of the long U.S. bull run in stocks, sank 3.1 percent. Defensive groups utilities <.splrcu> and real estate <.splrcr> were the lone sectors in positive territory.
"Some of the defensive areas and defensive stocks seem to be picking up a bid at the expense of that continued rotation out of some of the more growth-oriented sectors,” said Chuck Carlson, chief executive officer at Horizon Investment Services in Hammond, Indiana.
European shares were lower led by a sell-off in technology stocks after earnings and M&A news from German heavyweights Infineon
The pan-European STOXX 600 index <.stoxx> lost 1.01 percent.
MSCI`s gauge of stocks across the globe <.miwd00000pus> shed 1.40 percent, on pace for its third straight session of declines.
Oil prices rose, breaking a stretch of losses, after Saudi Arabia said OPEC and its partners believed demand was softening enough to warrant an output cut of 1 million barrels per day next year.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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