Stocks lower on growth concerns, copper plunges

Wed Jan 14, 2015 4:17pm EST
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By Ryan Vlastelica

NEW YORK (Reuters) - Securities around the world fell on Wednesday after the World Bank cut its economic growth forecasts for 2015 and 2016, with stocks down across regions and copper suffering its biggest one-day drop in more than three years.

The outlook fueled fears that the benefits of cheaper oil may be offset by anemic economies and the threat of deflation, sending investors to seek safety in government debt, while the U.S. dollar slumped against the yen.

The S&P 500 fell for a fourth straight day, while the CBOE Volatility index extended its year-to-date advance to 13.6 percent.

Adding to the cautious tone in the United States, JPMorgan Chase & Co reported earnings that missed expectations, sending its shares down 3.5 percent to $56.81. The financial giant, a Dow component, was one of the first bellwethers to report quarterly results, casting a pall on the nascent earnings season.

Separately, government data on December U.S. retail sales came in much weaker than expected, with sales down 0.9 percent.

"Lower growth was on everyone's mind, but to see the World Bank come out like this really put people on edge, as did the retail sales, which I found more surprising than anything," said Robert Pavlik, chief market strategist at Boston Private Wealth in New York. "I would've expected a slight improvement, if anything, given the drop in gas prices."

The day's losses were widespread but especially dramatic for copper, a key industrial metal, which fell 6 percent to the lowest level in more than half a decade as the World Bank outlook triggered fears about global growth. It was the biggest one-day drop since 2011, and its sixth straight daily decline. Silver was off 1.2 percent. Gold dipped 0.1 percent.

In the equity space, the MSCI International ACWI Price Index fell 0.7 percent while shares in Japan lost 1.7 percent.   Continued...

A man walks under an electronic information board at the London Stock Exchange in the City of London January 2, 2013. REUTERS/Paul Hackett