Global shares tumble on global growth concerns; Treasury yields fall

February 8, 2016 11:06 AM

Stock indexes worldwide tumbled on Monday, led by banking stocks in Europe and technology stocks on Wall Street on persisting fears of a global economic slowdown, while benchmark 10-year Treasury yields hit their lowest in a year on demand for assets deemed less risky.

European shares extended the previous week's big losses, with the FTSEurofirst 300 index of top regional shares falling more than 3% to its lowest in 16 months. Cyclical sectors such as banking and automobiles bore the brunt of the selloff.

The STOXX Europe 600 banking index tumbled over 5.5%, putting the index's losses for this year at more than 24% on concerns about banks' profit outlook amid a negative rate environment.

Wall Street continued Friday's technology-led selloff, with the benchmark S&P 500 stock index falling more than 2%. The S&P financial index fell about 3%, with shares of Bank of America, JPMorgan and Citigroup dragging down the index.

The cost of insuring the European financial sector's senior debt against default also climbed to its highest level since late 2013.

U.S. crude prices fell after a meeting between Saudi Arabia and Venezuela failed to reassure investors of measures to bolster sagging prices.

Shares of Chesapeake Energy fell over 50% to their lowest levels since 1999 on reports the company had hired restructuring lawyers.

"We need oil to stabilize to provide some confidence for investors, partly because to a degree, investors' stress is high, earnings visibility is low, and market internals continue to weaken," said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management in Minneapolis.

Brent crude  was last down 37 cents, or 1.09%, at $33.69 a barrel. U.S. crude  was last down 47 cents, or 1.52%, at $30.42 per barrel.

MSCI's all-country world equity index, which tracks shares in 45 nations, was last down 7.5 points, or 2.05%, to 359.07.

Page 1 of 2
About the Author