Global equities drop as commodities tumble, dollar up

Tue Sep 22, 2015 5:03pm EDT
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By Michael Connor

NEW YORK (Reuters) - Tumbling commodities prices and worries about China's economy pulled stocks sharply lower on Tuesday, while bond yields declined and the dollar rose to a two-week high on bets U.S. officials will soon hike interest rates.

Wall Street losses hovered for much of the trading day around 2 percent on selling driven by falls in oil and copper before easing.

European shares were also stung by the commodities sell-off, with the pan-European FTSEurofirst 300 stocks index .FTEU3 finishing down 3.3 percent.

Wall Street's Dow Jones industrial average .DJI fell 179.92 points, or 1.09 percent, to 16,330.47, the S&P 500 .SPX lost 24.23 points, or 1.23 percent, to 1,942.74 and the Nasdaq Composite .IXIC dropped 72.23 points, or 1.5 percent, to 4,756.72.

The S&P materials index .SPLRCM, down 1.8 percent, led a broad decline in the S&P 500 stock index.

Copper prices CMCU3 were down 3.6 percent after touching three-week lows, while oil was off 2 percent. The Chinese government's efforts to stimulate growth by easing fiscal and monetary policy have failed to calm nerves in global markets.

"Investors are nervous because there is a sense that the Fed knows more than it is letting on regarding the health of the global economy," said Art Hogan, chief market strategist at Wunderlich Securities in New York.

The Federal Reserve last week kept U.S. rates near zero, citing turbulence in a tightly linked global economy, including slowing growth in China.   Continued...

Traders work on the floor of the New York Stock Exchange September 22, 2015. REUTERS/Brendan McDermid