Declines In Overseas Markets, Rise In Dollar Create Uncertainty On Wall Street

Wall Street
Photo Courtesy: UPI

NEW YORK, Sept. 23 (UPI) — A mix of good and bad news put Wall Street in a holding pattern Wednesday, effectively leaving traders in limbo — unaware how it would affect the global economy.

Manufacturing and service sector growth in Europe in September declined, according to Markit figures. The manufacturing index fell to 52 from 52.3 in August, while services also fell. For the quarter, though, growth was the highest in four years.

Perhaps of greater impact is the sector’s nosedive in China — where the index fell from 47.3 to 47 this month — to a six-year low, according to the Caixin/Markit PMI.

“We are now at a stage where, unless we have awful economic data from Beijing, traders will react well to it,” IG market analyst David Madden said. “Cash has flowed back into commodity stocks, which are enjoying some needed respite today; but nobody is under the illusion that this will last long.”

Uncertainty created by the Federal Reserve‘s lack of policy action last week are contributing to some analysts’ concern — and fallout over Volkswagen’s emissions rigging scandal has only added to trepidation in the auto industry.

“Investors are likely to stay away from the automobile sector for a while, as they could be wondering which company might be next,” said Roland Kaloyan, European equity strategist at Société Générale. “Ahead of this scandal, the sector was already under pressure over the summer due to the deteriorating emerging market newsflow.”

Other, more positive indicators, though, muddle the overall picture somewhat.

The domestic manufacturing index, though, beat expectations by remaining at 53. Analysts had forecast a decline to 52.8.

The dollar, also, rose against other international currencies — and the euro rose even higher. The yield on the benchmark 10-year U.S. Treasury bond rose to 2.15 percent, Fox Business reported Wednesday.

China President Xi Jinping continued his tour of the United States Wednesday — in Seattle he participated in a business roundtable with executives from Amazon, Apple and Microsoft.

Equity markets were lower on Wednesday afternoon and the Dow Jones Industrial Average fell nearly 75 points by midday.

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