The three major indices shed over 1.5 percent as U.S. stocks tumbled as a slowdown in global economic growth hurt investor confidence. The IMF lowered its global growth projections for 2015 from 4 percent to 3.8 percent and its forecast for 2014 from 3.4 to 3.3 percent. Germany’s industrial output also shed 4 percent, its most since 2009. The Dow closed 1.60 percent lower on Tuesday at 16,719.39 while the S&P 500 fell 1.51 percent to 1,935.10. The S&P fell below its 100-day moving average, indicating weak near-term momentum. Cyclical shares led the decline in S&P 500 sectors. The Nasdaq also fell 1.56 percent to 4,385.20.
Shares of beverage giant Coca-Cola Co (KO.N) were the only ones to buck the trend among 30 Dow components, ending 0.7 percent higher at $43.92. The company’s share price traded within a dollar of an all-time intraday high of $44.44 since 1998. On the other hand, Caterpillar Inc (CAT.N) pulled the Dow down, losing 3.4 percent to $94.70. SodaStream International Inc. SODA dipped 22% ahead of the closing bell as the company warned of less than expected quarterly sales.
Asian markets opened in the red on Wednesday following concerns about a slowdown in global growth. Investors moved to safe haven bonds while oil prices hit a two-year low. Brent oil shed $1.18 to $90.93 a barrel while U.S. crude was last down $1.07 to $87.78. The drop may be a positive sign for consumer spending but a reason for disinflation in the developed world. The Nikkei .N225 and MSCI’s broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS were both down 1 percent. The Shanghai .SSEC was the only index to start the day on a positive note, up 0.5 percent.
The safe haven yen opened strongly on Wednesday in the wake of the IMF cut in its global economic forecasts and drop in German industrial output. The U.S. dollar was last trading online at 108.335 yen after dropping to a three-week low of 107.82 yen. The greenback had touched a six-year high of 110.09 a week ago. The euro touched a month-low of 136.50 yen but bounced back to 136.90 yen. Yields dropped again after a strong rally by U.S. Treasuries. The 10-year yield was close its 14-month trough of 2.303 percent set in August, falling as far as 2.337 percent. The euro was last trading at $1.2635.