Global stocks stumble after weak U.S. data, dollar slides
By Saqib Iqbal Ahmed
NEW YORK (Reuters) - Weak U.S. economic data and disappointing auto sales numbers drove Wall Street down on Tuesday, further dragging on global equity prices after the approval of a fiscal stimulus package by Japan's cabinet failed to cheer markets.
Data showing muted U.S. inflation hit the U.S. dollar, which dropped to a six-week low against a basket of currencies, while persistent worries of a supply glut sent U.S. crude prices back below $40 a barrel.
Wall Street suffered its worst day in nearly a month after data indicated inflation was still below the Federal Reserve's 2 percent target, raising doubts about the chances of a near-term rise in U.S. interest rates.
"People are starting to see that things aren’t quite as rosy as they might have thought in the month of July with that big run-up," said Peter Jankovskis, co-chief investment officer at OakBrook Investments LLC in Lisle, Illinois.
The S&P 500 climbed 3.6 percent in July, its strongest month since March. The dip in U.S. stocks weighed on the MSCI's world stocks index, which was down 0.65 percent.
The index, which tracks shares in 45 countries, added to losses suffered earlier in the session after Japan's approval of 13.5 trillion yen ($132 billion) in fiscal measures failed to boost investor sentiment.
The Dow Jones industrial average fell 90.74 points, or 0.49 percent, to close at 18,313.77, the S&P 500 lost 13.81 points, or 0.64 percent, to end at 2,157.03 and the Nasdaq Composite dropped 46.46 points, or 0.9 percent, to finish at 5,137.73.
Shares of Ford and General Motors both fell more than 4 percent after the two U.S. automakers reported disappointing July vehicle sales. Continued...