Global stocks slide on China, oil; North Korea test adds to worries
By Rodrigo Campos
NEW YORK (Reuters) - Stocks across the globe fell on Wednesday to their lowest in nearly three months as a move to weaken China's currency fuelled fears about the strength of the world's second largest economy and as Brent crude hit its lowest since 2004.
A nuclear test by North Korea added to a growing list of geopolitical worries including a row between Saudi Arabia and Iran that made any cooperation between major oil exporters to cut output even more unlikely.
Energy stocks led the slide on Wall Street, with the S&P 500 at a three-month low despite strong U.S. job market data. Losses deepened after minutes from the latest Federal Reserve meeting showed some Fed officials were worried that inflation could get stuck at dangerously low levels.
The U.S. dollar weakened and Treasury yields fell after the Fed minutes.
Traders and economists feared the move from China to further depreciate the yuan may mean the world's second-biggest economy is even weaker than had been expected and could trigger another wave of competitive devaluations in the region.
"The big influence continues to be concerns about what's going on in China ... in what appears to be an economy getting a little out of hand," said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.
"I think there's this theory going around that the global economy is going to slow greatly driven by a large slowdown in China."
North Korea's announcement that it had successfully tested a hydrogen nuclear device added to geopolitical worries stirred by a row between Saudi Arabia and Iran. The White House said Pyongyang might not in fact have tested a hydrogen bomb, which is much more powerful than an atomic bomb. Continued...