LAST CHANGE % CHG
DJIA 17440.6 -127.94 -0.73%
Nasdaq 5039.78 -48.85 -0.96%
S&P 500 2067.64 -12.01 -0.58%
Japan: Nikkei 225 20350.1 -194.43 -0.95%
Hang Seng 24352 -776.55 -3.09%
Shanghai Composite 3725.56 -345.35 -8.48%
S&P BSE Sensex 27561.4 -550.93 -1.96%
Australia: S&P/ASX 5589.9 23.8 0.43%
UK: FTSE 100 6505.13 -74.68 -1.13%
PRICE CHG YIELD%
U.S. 2 Year 1/32 0.662
U.S. 5 Year 8/32 1.565
U.S. 10 Year 13/32 2.217
Australia 10 Year 17/32 2.766
China 10 Year 3/32 3.510
India 10 Year 2/32 8.008
Japan 10 Year 0/32 0.412
German 10 Year 0/32 0.650
LAST(MID) CHANGE
Australia $ (AUD/USD) 0.727 -0.0012
Yen (USD/JPY) 123.25 -0.57
S. Korean Won (USD/KRW) 1167.45 -2.9
Chinese Yuan (USD/CNY) 6.2089 0.0004
Euro (EUR/USD) 1.109 0.0105
WSJ Dollar Index 88.15 -0.32
LAST CHANGE % CHG
Crude Oil 47.02 -1.12 -2.33%
Brent Crude 52.91 -1.71 -3.13%
Gold 1093.8 7.8 0.72%
MARKETS AT A GLANCE (Data as of approximately 5 p.m. ET)
SNAPSHOT
China's big selloff extended into European and North American trading on worries the government is paring back support for equities. U.S. stocks ended lower, the dollar weakened and oil futures fell. Treasurys and gold prices gained as investors sought safety.
OPENING CALL
A spokesman for China's top securities regulator said late Monday night that the government will step up its purchases of stocks, seeking to allay concerns that the government could soon pull back on its recent attempts to underpin the market.
Nonetheless, Monday's selloff in China stock markets has oil investors worried about a problem with global demand for crude oil before the sector's even fixed its over-supply problem. Price Futures' Phil Flynn says it is too early to tell whether stock movements may eventually affect China's long-standing voracious appetite for petroleum. "If the fears over China are overblown, then supplies could tighten quickly by the end of the year. We have to monitor to see just how bad things are. Up until now China was on target for record oil imports," he said.
EQUITIES
A sharp slump in Chinese markets heaped further pressure on U.S. stocks, sending the Dow Jones Industrial Average to its lowest level in nearly six months after patchy economic data and corporate earnings spurred declines last week.
China stocks suffered their sharpest drop in eight years amid concerns the government is pulling back on measures to prop up the market. The Shanghai Composite Index ended down 8.5%, its second-straight day of losses and worst daily percentage fall since Feb. 27, 2007.
The slide in Chinese shares has shaken investors in recent weeks and raised questions about the underlying economic health and pace of growth of the once-booming economy. Monday's decline marks the fifth-straight day of losses for both the S&P and the Dow. The S&P 500 is now up just 0.4% for the year. The Dow, which had its steepest point decline last week since December, has lost 2.2% so far this year.
"The problems we are now seeing in China are the inevitable result of an economy that had grown too fast and at any cost," said Michael Farr, president of financial adviser Farr, Miller & Washington, which manages about $1.2 billion. He added that China's massive economic footprint means "China is a much bigger risk right now than Greece ever was."
"When a major index goes down 8% in one day, it's going to impact investor sentiment for sure," said Michael Antonelli, equity sales trader at Robert W. Baird. "The unknowns are really large there in terms of what the government can do to intervene in the market."
A sharp rally two weeks ago after Greece reached a deal with its creditors to negotiate a new bailout has foundered amid lackluster earnings in Europe and the U.S., said Francois Savary, who oversees $11.4 billion as chief strategist at Swiss bank Reyl.
"There are a lot of bets that the economic recovery in Europe is here and that is going to boost earnings," he said. "So far it is OK, but it isn't stellar."
In corporate news, Teva Pharmaceutical Industries said it would buy Allergan's generics unit for $40.5 billion in cash and stock. Separately, Teva said it would drop its bid for Mylan. Teva shares rose 8.9%, and those of Allergan added 6.1%.
FOREX
The dollar fell against the euro and yen, as investors locked in profits on recent gains in the U.S. currency on fears that unstable Chinese stock markets could keep the Federal Reserve from raising U.S. interest rates in coming months.
Chinese stocks tumbled Monday to their sharpest loss since 2007 on worries that authorities are pulling back on measures to support the market. Some investors believe the turmoil in Chinese equities will make the Fed more cautious when it comes to tightening monetary policy, prompting them to sell dollars and buy the euro and yen. The prospect of a rate increase as early as September has boosted the dollar in recent weeks, as higher U.S. borrowing costs make the dollar more attractive to investors seeking yield.
"We have to become rock-solid convinced that the Fed is moving in September to get the next leg of the dollar rally," said Kit Juckes, a strategist at Societe Generale. "On a day like today, it's hard to be convinced."
Investors are awaiting the conclusion of the Fed's monetary policy meeting Wednesday, as they look for fresh hints regarding the timing of the central bank's rate increases. Fed Chairwoman Janet Yellen emphasized in congressional testimony earlier this month she expects the central bank to start lifting its benchmark federal-funds rate at some point before year-end.
BONDS
U.S. Treasurys were on the receiving end of a selloff in global equities, though gains were held in check ahead of a Federal Reserve policy announcement.
Those gains came as equity markets in China suffered sharp declines, with the Shanghai Composite Index posting its worst daily percentage loss since February 2007. Concerns about stability in those markets put pressure on stocks in Europe and the U.S.
"Treasurys got a bid right out the gate in response to the weaker equity prices, but keeping the market from rallying even more is the upcoming supply and the FOMC meeting," said Gary Pollack, head of fixed-income trading at Deutsche Bank's private wealth-management arm.
Treasury prices slipped slightly from session highs midday as focus turned to a coming batch of U.S. government debt offerings, which typically weigh on bond prices. The Treasury is scheduled to sell a combined $90 billion in two-, five- and seven-year notes over the next three sessions.
Also keeping some bond buyers at bay, the Federal Reserve kicks off its policy meeting Tuesday before releasing a statement on Wednesday. Although market participants don't expect the central bank to make any major policy changes, many say the statement could set the stage for a widely expected interest-rate increase this fall--which would mark the first rate rise in nearly a decade.
"Global conditions are certainly far from ideal, but with Greek concerns resolved and only Chinese equity wobbles presenting a near-term challenge, the FOMC may sound more upbeat on rate hike prospects," said Gennadiy Goldberg, a U.S. strategist at TD Securities. He said that such a signal from the Fed could put further pressure on shorter-dated notes.
COMMODITIES
Oil prices fell to a four-month low on concerns about a selloff in Chinese stock markets and increased oil drilling in the U.S.
U.S. oil prices have slumped 20% this month as the global glut of oil shows no signs of abating. Production remains near multidecade highs in the U.S., Saudi Arabia and elsewhere, and analysts say demand could decline in the second half of the year after the busy summer-driving season ends.
Analysts also noted that oil prices fell alongside the dollar on Monday.
"With the dollar so weak today and crude down, I think that just shows how weak fundamentally crude is," said Tariq Zahir, managing member at Tyche Capital Advisors. "I can't find one bullish indicator out there."
In other commodity markets, gold prices rose, nudging upward from a five-year low, after a steep drop in Chinese equities spurred some investors to buy the precious metal as a hedge.
TODAY'S HEADLINES
Teva to Buy Allergan Generics for $40.5 Billion
Teva Pharmaceutical said it would buy Allergan's generics unit for $40.5 billion in cash and stock, in a deal that will vault the Israeli company into the top ranks of global drug makers.
Baidu Profit Rises 3.3%; Outlook Misses Analysts' Views
Baidu said its second-quarter earnings rose 3.3% as revenue growth was mostly offset by the Chinese search-engine giant's higher expenses.
U.S. Durable Orders Up 3.4% in June
New orders for durable goods rose a seasonally adjusted 3.4% in June from a month earlier, the Commerce Department said.
McGraw Hill Financial to Buy SNL Financial for $2.2 Billion
McGraw Hill Financial reached a deal to buy SNL Financial for about $2.23 billion in cash, a move to expand its data services.
Lawyer Emails Put Visa, MasterCard Settlement at Risk
The discovery of a trove of emails between two opposing lawyers is threatening to scuttle the $6 billion class-action antitrust settlement.
Auto Regulators Vow to Continue Crackdown
Regulators who hit Fiat Chrysler with a $105 million settlement vowed to continue a crackdown on car makers over safety lapses.
Tsipras Races to Secure Greek Bailout
(MORE TO FOLLOW) Dow Jones Newswires
July 27, 2015 17:32 ET (21:32 GMT)
Talks on a new bailout program between Greece and its creditors will start on Tuesday, almost a week later than planned.
Delta Air to Buy 3.55% Stake in China Eastern
Delta Air Lines agreed to pay $450 million for a stake in China Eastern Airlines as part of an agreement that expands the two carriers' strategic partnership.
GT Advanced Secures Loan Approval
GT Advanced Technologies, which once had a deal to supply smartphone screen material to Apple, secured approval to borrow $95 million.
Goldman Sachs Bets on Indian Furniture Startup Pepperfry.com
Goldman Sachs is leading a $100 million investment in Pepperfry.com, a top Indian online furniture and home-products marketplace.
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TODAY'S CALENDAR
(Times in GMT, followed by country and event)
0645 FRA Jun Housing starts
0700 THA Jun Industrial Production Index
0800 ITA Jul Consumer Confidence Survey
0800 ITA Jul Business Confidence Survey
0830 UK May UK monthly service sector figures
0830 UK Q2 Gross Domestic Product: Preliminary Estimate (GDP)
0830 UK Jun Land Registry House Price Index
1145 US The Retail Economist/Goldman Sachs Weekly Chain Store Sales Index
1230 CAN Jun Industrial product & raw materials price indexes
1255 US Johnson Redbook Retail Sales Index
1300 US May S&P / Case-Shiller Home Price Index
1345 US Jul US Flash Services PMI
1400 US Jul Consumer Confidence Index
1400 US Q2 U.S. Housing Vacancies
1400 US Jul Richmond Fed Business Activity Survey
1400 US John Kerry and Jack Lew testify to U.S. House Foreign Affair Committee on Iranian nuclear deal
2030 US API Weekly Statistical Bulletin
2350 JPN Jun Preliminary Retail Sales
(END) Dow Jones Newswires
July 27, 2015 17:32 ET (21:32 GMT)
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