Global stocks drop with oil prices; long-dated bond yields rise
By Caroline Valetkevitch
NEW YORK (Reuters) - World stock markets and energy prices fell on Tuesday after energy consumers and producers both predicted an oil glut was likely to persist well into next year.
Long-dated U.S. bond yields rose to their highest levels in about three months, while the U.S. dollar edged up.
The International Energy Agency said a sharp slowdown in global oil demand growth, coupled with increasing inventories and rising supply, mean the market will be oversupplied at least through the first six months of 2017.
The IEA's comments followed a surprisingly bearish outlook from the Organization of the Petroleum Exporting Countries on Monday that also pointed to a larger surplus next year.
U.S. financial shares fell on weakened prospects of an interest rate hike in the near-term, adding to the negative tone in U.S. stocks, which ended more than 1 percent lower.
Volatility in stocks and other assets has picked up since Friday as investors have weighed chances of an interest rate hike at the Federal Reserve's Sept. 20-21 meeting.
Three Fed officials on Monday took a dovish stance on interest rates, in contrast to more aggressive comments from other officials in the past two weeks.
"You had this absolute rush of speakers and so many different points of view ... It certainly muddied the waters to a degree," said Jim Tierney, CIO of U.S. Concentrated Growth at AllianceBernstein in New York. Continued...