European stocks fell to the lowest level in eight weeks, while German government bonds rose and oil declined amid concern the global economy is weakening. Turkish stocks slid as clashes broke out near its Syrian border.
The Stoxx Europe 600 Index (INDEXCF) lost 0.9 percent at 11:13 a.m. in London, while Standard & Poor’s 500 Index futures (SPX) were little changed after the gauge’s lowest close in almost two months. Germany’s 10-year yield touched a one-month low. Turkey’s benchmark stock index lost 2 percent. Gold added 0.8 percent and Brent crude declined 1.1 percent.
European Union leaders are meeting in Milan today to discuss labor reform laws after the International Monetary Fund cut its global growth forecast. Tensions in Turkey are mounting as Islamic State militants threaten the town of Kobani across its border. The Federal Reserve will release minutes of its last meeting before Alcoa Inc. reports earnings amid reduced estimates for profit growth at U.S. companies.
There’s a “mixture of different bearish drivers,” said Roger Peeters, chief executive officer at Close Brothers Seydler Research in Frankfurt. “It would be a surprise if new pressure were to be generated by the Fed.”
A worldwide acceleration is weaker than the IMF predicted 2 1/2 months ago, the Washington-based lender said yesterday as it cut its growth outlook to 3.8 percent for 2015, from 4 percent. Some financial markets may be overheating after a sustained period of near-zero rates, according to the report.
Technology Stocks
The Stoxx 600 fell for a second day, with technology stocks sliding the most among 19 industry groups. Germany’s DAX Index (DAX) dropped as much as 10 percent from its July record and is heading for its lowest close since Aug. 8.
Air France-KLM Group (AF) declined 3 percent after saying the worst strike in its history may cut this year’s profit by 500 million euros ($632 million).
Swisscom AG (SCMN) advanced 3.8 percent after Reuters reported it’s working with UBS AG on a potential deal. Fiat SpA (F) gained 0.6 percent after Chief Executive Officer Sergio Marchionne said there is potential to form a new No. 1 in the auto industry.
The volume of Stoxx 600 shares changing hands today was 30 percent greater than the 30-day average, according to data compiled by Bloomberg.
Futures on the S&P 500 expiring in December were little changed after the index posted its worst two-day loss in more than two months.
Alcoa Reports
Alcoa, the largest aluminum producer in the U.S., unofficially starts the earnings-reporting season after markets close in New York. Results from Citigroup Inc. and JPMorgan Chase & Co. are due later in the week.
The MSCI All-Country World Index fell 0.3 percent for a second daily decline. The MSCI Asia Pacific Index (MXAP) lost 1 percent after a two-day gain.
The cost of insuring European corporate debt rose for a third day, with the Markit iTraxx Europe Index of credit-default swaps on 125 investment-grade companies climbing two basis points to 69, the highest level since Aug. 8, according to data compiled by Bloomberg.
The yield on Britain’s 10-year government bonds fell four basis points to 2.25 percent and touched 2.24 percent, the lowest since July 2013.
The rate on similar-maturity German bunds fell to 0.88 percent, the least since Sept. 2. Italian 10-year bonds fell, pushing the yield up two basis points to 2.37 percent.
