New York - Global equity markets fell on Monday as civil unrest in Hong Kong weighed on investor sentiment, while Treasury prices rose as further signs of the relative strength of the U.S. economy raised the prospect of higher interest rates.
Stocks on Wall Street opened sharply lower following declines in Europe and Asia as Hong Kong democracy protesters defied volleys of tear gas and police baton charges in one of the biggest political challenges for China since the Tiananmen Square crackdown 25 years ago.
Shares of companies exposed to Hong Kong fell, including HSBC and luxury goods group Richemont. HSBC fell 2.5 percent and Richemont fell 1.6 percent.
Losses on Wall Street were initially broad, with all 10 of the S&P 500's sectors lower as equity investors shrugged off the latest data showing strong U.S. economic growth. Stocks subsequently came off their lows.
U.S. consumer spending accelerated in August, while contracts to purchase previously owned homes fell more than expected last month but were still at the second-highest level of the year. Investors are keen to see Friday's much-anticipated jobs report for September for further signs on the economy.
“There is global uncertainty this morning. You've got some worrying protests in Hong Kong; overall it's quite thin and the markets are really waiting for payrolls on Friday,” said Gennadiy Goldberg, an interest rate strategist at TD Securities in New York.
The Dow Jones industrial average was down 79.50 points, or 0.46 percent, at 17,033.65. The Standard & Poor's 500 Index was down 8.28 points, or 0.42 percent, at 1,974.57. The Nasdaq Composite Index was down 10.11 points, or 0.22 percent, at 4,502.09.
MSCI's all-country world index was down 0.5 percent, as was the FTSEurofirst 300 index.
Benchmark 10-year U.S. Treasury notes gained 13/32 in price to yield 2.4879 percent.
The dollar erased early gains against the yen on nervousness that the democracy protests in Hong Kong might hurt the local economy and the city's status a global financial hub.
During bouts of political tension, investors often seek the safe haven of the Japanese currency.
The greenback gained 0.1 percent to 109.38 yen after hitting a six-year peak of 109.74 yen in Asian trading, according to Reuters data. The euro rose 0.02 percent to $1.2686.
Brent oil fell below $97 a barrel, moving closer to a two-year low hit last week as weak data from major buyer China and a stronger U.S. dollar added to pressure from heavy supply.
Brent for November delivery fell 20 cents to $96.80 a barrel. U.S. crude rose 8 cents to $93.62 a barrel.
Reuters