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The Stoxx Europe 600 Index lost 0.5 percent at 7:12 a.m. in New York, while Standard & Poor’s 500 Index futures (SPX) rose 0.2 percent after the gauge’s lowest close in almost two months. Germany’s 10-year yield touched a one-month low. Turkey’s benchmark stock index lost 2 percent. Gold added 0.7 percent and Brent crude declined 0.9 percent.
European Union leaders are meeting in Milan today to discuss labor reform laws after the International Monetary Fund cut its
global growth forecast. Tensions in Turkey are mounting as Islamic State militants threaten the town of Kobani across its border. The Federal Reserve will release minutes of its last meeting before Alcoa Inc. reports earnings amid reduced estimates for profit growth at U.S. companies.
There’s a “mixture of different bearish drivers,” said Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt. “It would be a surprise if new pressure were to be generated by the Fed.”
A worldwide acceleration is weaker than the IMF predicted 2 1/2 months ago, the Washington-based lender said yesterday as it cut its growth outlook to 3.8 percent for 2015, from 4 percent. Some financial markets may be overheating after a sustained period of near-zero rates, according to the report.
Technology Stocks
The Stoxx 600 fell for a second day, with technology stocks sliding the most among 19 industry groups. Germany’s DAX Index (DAX) dropped as much as 10 percent from its July record and is heading for its lowest close since Aug. 8.Air France-KLM Group (AF) declined 2.4 percent after saying the worst strike in its history may cut this year’s profit by 500 million euros ($632 million). SAP SE fell 4 percent after Boerse Online reported the company will freeze hiring until 2015 in order to reduce costs.
Swisscom AG (SCMN) advanced 4 percent after Reuters reported it’s working with UBS AG on a potential sale of its Italian broadband unit. Fiat SpA (F) gained 1.3 percent after Chief Executive Officer Sergio Marchionne said there is potential to form a new No. 1 in the auto industry.
The volume of Stoxx 600 shares changing hands today was 30 percent greater than the 30-day average, according to data compiled by Bloomberg.
Futures on the S&P 500 expiring in December rose after the index posted its worst two-day loss in more than two months.
Alcoa Reports
Alcoa, the largest aluminum producer in the U.S., unofficially starts the earnings-reporting season after markets close in New York. Results from Citigroup Inc. and JPMorgan Chase & Co. are due later in the week.The MSCI All-Country World Index fell 0.3 percent for a second daily decline. The MSCI Asia Pacific Index (BCOM) lost 1 percent after a two-day gain.
The cost of insuring European corporate debt rose for a third day, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies climbing two basis points to 69, the highest level since Aug. 8, according to data compiled by Bloomberg.
The yield on Britain’s 10-year government bonds fell two basis points to 2.27 percent and touched 2.24 percent, the lowest since July 2013.
The rate on similar-maturity German bunds fell to 0.88 percent, the least since Sept. 2. Italian 10-year bonds fell, pushing the yield up one basis point to 2.35 percent.
Treasuries
Treasury 10-year notes were little changed before the Fed publishes the minutes of its Sept 16-17 policy meeting at 2 p.m. in Washington. The report may reveal clues about the policy makers thinking on the timing of an interest-rate increase.Officials last month raised their median estimate for the benchmark federal funds rate to 1.375 percent by the end of 2015, compared with a June forecast of 1.125 percent. The rate has been in a range of zero to 0.25 percent since December 2008.
The dollar erased a 0.4 percent advance against the euro. The Bloomberg Dollar Spot Index (INDEXCF) added 0.1 percent, ending a two-day decline.
Emerging-market stocks fell for the first time in four days and currencies weakened. Turkey’s benchmark Borsa Istanbul National 100 Index slid to the weakest level since April, as the market reopened after a holiday.
Turkey Clashes
The region’s Kurds protested the government’s response to the advance of Islamic State just across the Syrian border. Clashes broke out across southeast Turkey, with Haberturk website reporting at least 15 people were killed in the violence, most of them in Diyarbakir, Turkey’s largest Kurdish city. A curfew was imposed there at 10 p.m. local time.Russia’s Micex Index slid 1 percent in the second day of losses while the ruble retreated 0.2 percent to 39.99 against the dollar. The central bank sold $420 million of foreign currency in its third day of interventions this month to slow the ruble’s decline.
The monetary authority spent the funds on Oct. 6 to shore up the ruble, according to the latest data on its website. The bank also said it shifted the upper boundary of the currency’s trading band by 5 kopeks, signaling it may have spent as much as $2 billion in the past three trading days.
The Bloomberg Commodity Index declined 0.4 percent led by energy. Brent fell as much as 1.5 percent to $90.76 a barrel, the lowest since June 2012. Gasoline dropped 1.7 percent and West Texas Intermediate oil slipped as much as 1.6 percent to $87.39 a barrel, the lowest since April 2013. Gold climbed for a third day to $1,216.82 an ounce and platinum rallied 1.2 percent to $1,273.25 an ounce.
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