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Midday Update: Turkey's Spiraling Financial Crisis Sends Global Markets Into Turmoil


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Wall Street's major averages were orbiting their session lows and were trading with sizable losses as fears of contagion from Turkey's economic crisis weighed on global equities. The Dow fell by more than 200 points at the open as risk aversion was magnified by the meltdown in the Turkish lira which prompted President Donald Trump to double the tariff on imports on Turkish steel and aluminium.

Panic selling erupted overnight when a regulatory body of the European Central Bank warned of the exposure several prominent European banks had to Turkey's economic meltdown. Shockwaves reverberated throughout Europe and the US after Turkish president Recep Erdogan's nationalistic speech torpedoed the lira and investor confidence.

Losses mounted when Trump authorized higher tariffs on imported Turkish steel and aluminium, sending the lira to another all-time low with a loss of more than 25%. Led by losses in the financial and materials sectors, the Dow fell to its lowest level in more than a week while the Nasdaq was in the red for the first time in nine days.

The Nasdaq was still slated to close the week higher, but the Dow and S&P 500 are headed for a negative close after a 6-week string of gains.

The headlines surrounding Turkey overshadowed benign inflation data in which consumer prices were up an as-expected 0.2% in June for both the nominal and the core. Year-over-year, the CPI was unchanged at 2.9% but the core inched up to 2.4% from 2.3%.

European bourses suffered heavy losses with the banking sector especially vulnerable to Turkey's currency and financial crises. Germany's Dax lost 2% in value, followed by a 1.60% loss in France's CAC 40.

Crude oil was up $0.83 to $67.64 per barrel. Natural gas was up $0.02 to $2.94 per 1 million BTU. Gold was down $0.30 to $1,219.60 an ounce, while silver was down $0.14 to $15.32 an ounce. Copper was down $0.02 to $2.74 per pound.

Among energy ETFs, the United States Oil Fund was up 1.30% to $14.06 with the United States Natural Gas Fund down 0.60% to $24.07. Amongst precious-metal funds, the Market Vectors Gold Miners ETF was down 0.80% to 20.54 while SPDR Gold Shares were up 0.02% to $114.76. The iShares Silver Trust was down 0.73% to $14.41.

Here's where the markets stand at mid-day:

US MARKETS

NYSE Composite Index was down 79.77 points (-0.76%) to 12,857.62

Dow Jones Industrial Index was down 183.72 points (-0.72%) to 25,325.51

S&P 500 was down 16.55 points (-0.58%) to 2,837.15

Nasdaq Composite Index was down 30.96 points (-0.39%) to 7,860.99

GLOBAL SENTIMENT

FTSE 100 was down 74.76 points (-0.97%) to 7,667.01

DAX was down 251.76 points (-1.99%) to 12,424.35

CAC 40 was down 87.57 points (-1.59%) to 5,414.68

Nikkei 225 was down 300.31 points (-1.33%) to 22,298.08

Hang Seng Index was down 240.68 points (-0.84%) to 28,366.62

Shanghai China Composite Index was up 1.06 points (+0.04%) to 2,795.44

NYSE SECTOR INDICES

NYSE Energy Sector Index was down 71.78 points (-0.60%) to 11,876.04

NYSE Financial Sector Index was down 94.73 points (-1.16%) to 8,039.42

NYSE Healthcare Sector Index was down 55.31 points (-0.36%) to 15,475.50

UPSIDE MOVERS

(+) AWX (+46.90%) Reported upbeat Q2 results

(+) MDLY (+44.29%) Agreed to merge with Sierra

(+) TTD (+35.17%) Q2 results beat expectations, issued strong Q3 and FY18 guidance

DOWNSIDE MOVERS:

(-) ELGX (-40.08%) Reported wider-than-expected loss, cuts FY outlook below street

(-) XONE (-15.23%) Missed Q2 EPS and sales estimates

(-) CORT (-6.80%) Q2 results missed estimates, lowers revenue guidance

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 MTNewswires.com. All rights reserved. Unauthorized reproduction is strictly prohibited.



This article appears in: Investing , Stocks
Referenced Symbols: AWX , MDLY



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