Stocks slip as Wall Street remains on edge

Traders
work on the floor of the NYSE in New York
Thomson Reuters

Wall Street remained on edge Monday as all eyes remained on
rising US rates, trade tensions, and the prospect of dampened
economic growth across the world. 

The three major US indices continued to slide after shedding
about 4% last week. With technology stocks that have
led the latest bull run among the biggest losers, the Nasdaq
Composite fell 0.5%. The S&P 500 slid 0.3% to below its
200-day moving average, and the Dow Jones industrial average was
down 0.1%. 

“The pullback in US stocks reflect a host of different factors
but the range break of real yield introduces fresh uncertainty
around the world’s financial plumbing,” Mark McCormick, a
strategist at TD Securities, wrote in an email. 

Treasury yields pared sharp gains, with the 10-year at 3.15% and
the 2-year at 2.85%, following weaker-than-expected economic
data. With the prospect of continued tightening by
the Federal Reserve in mind, investors had
sold off bonds last week and sent yields to seven and a half year
highs. 

In premarket trading, a closely-watched measure of consumer
spending came in well below economist expectations.
US retail sales barely budged in September, the Commerce
Department said, up 0.1% in September. Economists polled by
Reuters had forecast a 0.6% gain. 

But diplomatic tensions between the US and Saudi Arabia over the
disappearance of a Washington Post journalist
pushed oil prices higher, with Brent crude, the international
benchmark, up almost 1% at $81.29 a barrel. Turkish
officials believe Jamal Khashoggi, a critic of Crown Prince
Mohammed bin Salman, was murdered after entering the Saudi
consulate in Istanbul nearly two weeks ago. Riyadh denies those
allegations.

Over the weekend, President Donald Trump
threatened Saudi Arabia with “severe punishment” if it is
found responsible. The oil-rich country, which signaled it could
respond with economic penalties, is set to play an even more
crucial role in maintaining global supply when US sanctions
against Iran kick in next month.