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Turkey trouble rattles Wall St., banks worst hit
Published On: Fri, Aug 10th, 2018

Turkey trouble rattles Wall St., banks worst hit

(Reuters) – 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.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., July 24, 2018. REUTERS/Brendan McDermid

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 (C.N), the most global among the major U.S. banks, fell 2 percent. JPMorgan (JPM.N), Wells Fargo (WFC.N) and Bank of America (BAC.N) 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. [US/]

Shares of trade-sensitive companies also declined, with Boeing (BA.N), 3M (MMM.N) and Caterpillar (CAT.N) falling between 1.5 percent and 2 percent.

At 10:46 a.m. EDT the Dow Jones Industrial Average .DJI was down 232.05 points, or 0.91 percent, at 25,277.18, the S&P 500 .SPX was down 19.90 points, or 0.70 percent, at 2,833.68 and the Nasdaq Composite .IXIC was down 50.51 points, or 0.64 percent, at 7,841.27.

S&P technology sector’s .SPLRCT 0.57 percent fall was led by chipmakers. Intel (INTC.O) dropped 2.7 percent after Goldman Sachs downgraded the stock to “sell”.

Microchip (MCHP.O) 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.

Reporting by Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva

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Turkey trouble rattles Wall St., banks worst hit