Turkey trouble rattles Wall Street, banks worst hit
U.S stocks slid on Friday, with banks taking the biggest hit, as concerns over Turkey`s economy and its deepening rift with the United States roiled stock markets around the world.
At the center of the Turkish crisis was a sharp slump in its currency, which worsened further after President Donald Trump doubled tariffs on steel and aluminum imported from the country.
"The currency crisis is actually a banking crisis as Turkey owes so much money to so many different banks, that they risk a potential contagion," said David McKnight, adviser at David McKnight & Co in Puerto Rico.
"As long as Trump is going to be willy-nilly with tariffs, there`s going to be a lot of uncertainty and markets thrive on certainty."
Citigroup, the most global among the major U.S. banks, fell 2 percent. JPMorgan, Wells Fargo and Bank of America were all down about 1 percent.
Investors fled to safe-haven assets, with the dollar rising to a 13-month high and U.S. bond yields slipping to a three-week low.
Shares of trade-sensitive companies also declined, with Boeing, 3M and Caterpillar falling between 1.5 percent and 2 percent.
At 10:46 a.m. EDT the Dow Jones Industrial Average was down 232.05 points, or 0.91 percent, at 25,277.18, the S&P 500 was down 19.90 points, or 0.70 percent, at 2,833.68 and the Nasdaq Composite was down 50.51 points, or 0.64 percent, at 7,841.27.
S&P technology sector`s 0.57 percent fall was led by chipmakers. Intel dropped 2.7 percent after Goldman Sachs downgraded the stock to "sell".
Microchip shares fell 11.8 percent, the biggest decliner on the S&P, after it forecast disappointing second-quarter revenue.
Data on Friday showed U.S. consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures.
Declining issues outnumbered advancers for a 1.99-to-1 ratio on the NYSE and for a 1.46-to-1 ratio on the Nasdaq.
The S&P index recorded 9 new 52-week highs and seven new lows, while the Nasdaq recorded 57 new highs and 62 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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