Market turmoil: Wall Street hit after European shares hit 16-month low – as it happened
Worries over the world economy and the outlook for banks have sent global stock markets tumbling again
- Latest: Dow Jones down 177 points at the close
- European markets hit by growth fears
- Global downturn fears hit stocks
- Greek stock market plunges
- Deutsche Bank hit hard amid EU banking fears
9.21pm GMT
That's all from us until tomorrow, after another day dominated by wild swings in the markets and angst over the global economy.
Will Tuesday be different? Come back tomorrow and find out. Goodnight! GW
9.07pm GMT
Wall Street has closed for the night, after a day of turmoil in the major stock markets.
The Dow Jones industrial has finished down 177 points, or 1.1%, at 16,027, as gloom over global growth hit financial stocks.
Twitter closed at an all-time low https://t.co/P28SleuE8M pic.twitter.com/mR4NjyvLgX
"People are worried about the global economy and particularly now we are beginning to look at the banks.
"You are seeing more and more people saying: 'Is this 2008 again?' Maybe not quite as severe, but do we need to be worrying about the banking sector and risk assets on a bigger level?"
Related: Fears over weak growth prompt global stock markets to fall
8.51pm GMT
Hello..... the US stock market is staging a late rally, bouncing off its earlier lows.
The Dow is now down just 150 points, or 0.9%, having been down almost 400 points a couple of hours ago:
8.40pm GMT
Some big names are leading the Wall Street fallers, with 20 minutes until the closing bell is rung.
Investment bank Goldman Sachs is down 5.8%, mirroring the selloff in global banking stocks.
8.35pm GMT
Here's a few photos from Wall Street today, as traders faced another day of chunky losses.
8.28pm GMT
Deutsche Bank's soothing statement about its bond repayments may have calmed investors nerves a little.
Shares are creeping back from their lows on Wall Street, meaning the Dow is now only down 269 points, or 1.7%.
US equities trying to make a recovery
8.01pm GMT
Good news, there's only one hour to go until Wall Street closes and Manic Monday is over.
Bad news, the US stock market is still heavily in the red. The Dow is down 2.17%, or 351 points to the bad, with the S&P and Nasdaq in deeper trouble:
7.43pm GMT
Newsflash: Deutsche Bank has just issued a statement, saying it can meet a crucial debt repayment in April.
The Frankfurt-based bank, which was at the heart of today's market turmoil, says it has a "payment capacity" of around a1bn. That will cover the a350m due in April on its CoCo bonds -- debt which converts into shares, or is wiped out, if a bank hits financial problems and defaults.
7.26pm GMT
The stock market turmoil risks blowing a multi-billion pound black hole in the UK government's fiscal plans.
Britain's leading experts on the public finances are warning that the turmoil on global stock markets threatens to leave a 2bn black hole in George Osborne's deficit-reduction plans that could force the chancellor to raise taxes or make fresh cuts in spending to hit his budget targets.
On a day in which share prices crashed in Europe and the US, the Institute for Fiscal Studies said Osborne's plan to put the UK back in the black by the end of the current parliament was vulnerable to a protracted financial market panic.
Related: IFS warns market turmoil could leave black hole in George Osborne's plans
Related: IFS warns market turmoil could leave black hole in George Osborne's plans
7.12pm GMT
The Telegraph's Mehreen Kahn points out that the European banking sector has lost a sixth of its value in the last month.
Here's her take on today's market mayhem:
Global stocks were gripped by a fresh bout of panic selling on Monday raising fears over the health of the world's banking system for the first time since the financial crisis.
European markets slumped to their lowest level in more than two years amid an unremittingly bleak outlook for the global economy and concerns over the resilience of the world's biggest lenders.
7.06pm GMT
Anxious investors are continuing to pile into gold, sending it up to $1,200 per ounce for the first time in over seven months:
TROUBLE! Gold briefly jumped >$1200/oz for first time since June. pic.twitter.com/UVOISJXO2U
7.03pm GMT
So far this year, shares in America's largest banks have slumped by at least 15% as investors fear a global downturn.
Bank stocks in 2016. Absolute panic.
Chart of the Dow Bank Index: https://t.co/qynCxXYNzP$WFC $BAC $JPM $GS $C pic.twitter.com/cT6jGin9yy
This is the rise and fall of biotech. On one chart: https://t.co/8GPVtmeP1h$IBB $SPY $LABD $AMGN $REGN pic.twitter.com/gqaDToQPd6
6.41pm GMT
There's no sign, yet, that Wall Street might recover from its early selloff.
The Dow is stubbornly down around 344 points, or 2.1%, at 15,860 points.
#DAX -3.3%#FTSE -2.7%#IBEX -4.4%#DOW -2%
All I can say is thank god its pancake day tomorrow#ShroveTuesday pic.twitter.com/Vfl2tQQ4yd
6.28pm GMT
"Yelp" indeed.....
BREAKING: Shares of Yelp halted after earnings report unexpectedly released
BREAKING: Yelp announces CFO transition, says company intends to begin search for new CFO
BREAKING: Yelp Q4 EPS $0.11 Adj. vs. ($0.03) Est.; Q4 Revs. $153.7M vs. $152M Est.
BREAKING: Shares of Yelp resume trading & slide 10% after earnings are unexpectedly released early & announcing CFO transition.
6.26pm GMT
US technology stocks are being hit hard today.
Tesla, the electric car company, have slumped by 9% today, dropping below $150 for the first time in two years.
5.59pm GMT
Global markets suffered a bad start to the week, with the Chinese new year proving as turbulent as the slump in the early days of January.
Although the Chinese markets were closed, that did not end the recent spate of volatility facing investors. Fears about a slowdown in global growth returned with a vengeance, while banking shares were among the poorest performers on worries about the outlook, and the effect of negative interest rates on their business.
5.53pm GMT
There seems little justification for the day's slump in banking shares, said Laith Khalaf, senior analyst at Hargreaves Lansdown:
Markets are clearly worried about a global economic downturn at a time when central banks have little dry powder left to fight off recessionary forces. The tables were turned in the UK stock market today with recent winners suffering from profit-taking, while the miners were virtually the only stocks to keep their heads above water.
The collapse in the oil price has been a big shock to the financial system and its effects are still being absorbed by international stock markets, in particular the implications for global demand. Financials have been really badly hit of late, and in a sign of how dire things have got, some European banks are trading lower than they did during the depths of the financial crisis. There doesn't seem to be much justification for such a dismal outlook, but markets appear to be stuck in a negative feedback loop at the moment.
5.43pm GMT
Global stocks have already lost over $6 trillion in 2016. https://t.co/ZazY14GvN2 pic.twitter.com/1OFqG8Pd8g
4.53pm GMT
A sense of panic seems to be setting in, but any increase in the oil price might help markets, said Tony Cross at Trustnet Direct:
Equities across the globe have kicked off the week in a deeply downbeat mood. London's FTSE-100 has posted a 2.7% sell-off, pushing the benchmark index squarely back into bear-market territory, but losses across mainland Europe have been even more pronounced. The fact that WTI crude tested territory below $30/barrel once again has done nothing to help matters but we've got this overriding fear that another global slow down is imminent and many investors are adjusting portfolios to suit. The theme of risk aversion is buoying precious metals... as gold eyes a break above $1200 an ounce for the first time in over six months.
But 25 stocks [in the FTSE 100 are] sporting losses in excess of 5% on the day, underlying the sense of panic that is creeping in. Economic data remains thin on the ground tomorrow but given at least some of the downside in stocks can be attributed to that renewed weakness in oil, this remains a metric worth watching closely. Anything that fundamentally impacts on supply could be all it takes to instil some confidence in markets, but in the absence of any better news the bears are likely to remain in control.
4.40pm GMT
One reason for the current market problems is the US Federal Reserve ending its quantitative easing programme, says Bank of America Merrill Lynch.
Bloomberg has the story:
Ever since the Federal Reserve began to withdraw monetary stimulus, liquidity has steadily been drying up.
Therein lies the crux of the broader stress in financial markets, according to Bank of America Merrill Lynch, which have seen violent selloffs occur following the surprise revaluations of currencies in Switzerland and China, as well as Japan's introduction of negative interest rates.
4.28pm GMT
More turbulence in the banking sector, which has been by worries about negative interest rates, the outlook for profits and slowing global growth.
Trading in Barclays shares was halted briefly after volatile movements. Now resumed, the shares are down 5.4%.
4.16pm GMT
The way Deutsche Bank $DB is trading, Germany will soon be asking Greece for a bailout...
4.08pm GMT
With China's markets closed for the new year holiday, it is a worrying sign that share prices elsewhere continue to tumble, says Chris Beauchamp, senior market analyst at IG:
The selling that began this morning has gathered pace across the globe this afternoon, as the US joins in the one-way move.
Chinese investors will feel relieved that their market has taken the week off, but the absence of the volatility provided by Shanghai sends a worrying message - investors in the US and Europe are worried by many things, not least the current interest rate outlook in the US. Recent surveys of fund managers may indicate rising cash balances, but so far these appear to be remaining on the side lines, pulling the rug from under what remains of this bull market.
Banking shares across Europe buckled under the pressure of global growth concerns in concert with the ugly spectre of negative interest rates. Weak earnings from European banks, notably that of Deutsche Bank have seen investors significantly reassess the chance of an earnings turnaround after years of regulatory fines for past misdeeds.
The disappointing earnings across the sector from the big US firms to Credit Suisse whose chief executive asked to have his bonus cut by as much as 50% is refocusing investor attention on bad loan books which have not been addressed since the European crisis. In the days after Deutsche Bank issued a surprise profit warning, credit default swap spreads ballooned as investors started to question the bank's ability to fund itself. The CDS jump has caused a sharp drop in Deutsche Bank shares.
4.02pm GMT
Markets continue to slide, with the Dow Jones Industrial Average now down around 300 points.
Meanwhile in Greece, the Athens market has closed down 7.87% to 464.23, its lowest level in at least 25 years. Banks - as elsewhere - are among the biggest fallers, down up to nearly 30% in some cases.
The market is pricing in financial and political instability, and delays in the review.
3.27pm GMT
Sterling has hit a one week low, falling to $1.4393 amid worries about the outlook for banks and concerns about the effects of any vote from Britain to leave the European Union.
It is also at a 13 month low against the euro.
3.25pm GMT
The recent move by central banks to push interest rates into negative territory is bold but unco-ordinated and could lead to a "race to the bottom," according to Standard & Poor's.
The ratings agency said:
Four European central banks--in Switzerland, Denmark, and Sweden, plus the European Central Bank--have adopted negative policy rates, and Japan surprisingly joined the club on January 29 this year. "The Bank of Japan's decision to follow suit on negative rates is likely to reinforce the trend toward shrinking yields in core government bond markets, as the search for yield spreads from Japan into Europe," said Standard & Poor's economist Sophie Tahiri...
"The bold venture into negative interest rates signals to market participants that central banks will use all tools at their disposal to meet inflation targets," said Ms Tahiri. "The problem is that all developed markets' central banks face the same deflationary pressures from weak commodity prices and have the same incentive to use their exchange rate to combat those pressures."
2.55pm GMT
Here's a snapshot of the Dow movers, mainly down of course:
2.47pm GMT
Amid the current worries about the global economy, Europe could start moving up the list according to strategist Graham Secker at Morgan Stanley. In a new note he says:
We struggle to remember many occasions when investor sentiment was quite as bearish and widespread as it feels today. Sure, 2008 was worse as the global financial crisis and fears of global depression created panic in markets, but today's cool disdain for risk assets still takes some beating. When we were asked by a client this week what reason bullish investors were citing for their optimism, we had to confess that we couldn't answer as we hadn't met any in recent times. The collective noun for a group of bears is a 'sleuth', but it doesn't take much detective work just now to identify what investors are concerned about.
Recent investor caution tends to focus on fears of excess US dollar strength, low oil prices and/or China, but we think it is quite plausible that Europe moves back up the pecking order (to its more usual place some would say!) as we move through 2016. The UK's forthcoming referendum on EU membership, likely to take place in June, may appear the most plausible catalyst in the short term to raise regional risk premia, but the ongoing migrant issue risks eroding political cohesion over the medium term and political uncertainty is rising in the periphery.
Greece has a daunting debt repayment due this summer, Spain is currently without a government, new European regulations are preventing Italy from adopting an effective 'bad bank' solution and the recently elected socialist government in Portugal is reversing course on prior austerity and competitiveness improvements. During a cyclical upswing, markets are prone to overlook such concerns, but the opposite would be true if growth starts to relapse.
2.34pm GMT
US markets have followed Europe into the red, as fears about the global economy continue to rattle investors.
The Dow Jones Industrial Average is down 220 points or 1.3% while the S&P 500 is down just over 1% and the Nasdaq has fallen 1.7% at the open.
2.20pm GMT
With the Greek stock market at its lowest since at least 1990 and banks bearing the brunt of the selling, here is the huge damage done to the four biggest since the start of the year:
@Frances_Coppola Greece 4 biggest banks YTD Alpha Bank -45,38% NBG -40,82% Piraeus -51,08% Eurobank -47,31%.Market cap YTD from 11.5B to 6B
2.10pm GMT
Readers in America should brace themselves. The selloff that began in Europe this morning is heading your way.
Wall Street is expected to fall sharply when trading begins in 20 minutes time, as fears over the global economy reach New York.
"Equities are in a 'go-nowhere-fast' mode, with a downward bias in the near term.
1.58pm GMT
Some analysts are concerned that Deutsche Bank may struggle to repay some of its bonds, if economic conditions continue to deteriorate.
Deutsche Bank may struggle to pay coupons on its riskiest bonds next year if operating results disappoint or litigation costs are higher than expected, according to analysts at CreditSights Inc.
Bonds and stock of Germany's largest bank have plunged this year, with the shares shedding 35% of their value and its contingent convertible bonds -- known as CoCos, or additional Tier 1 securities -- turning in a similar performance. The cost of protecting the company's subordinated debt from default for five years using credit-default swaps has more than doubled since the end of 2015, rising to 420 basis points, a four-year high, from 187.
1.31pm GMT
The selloff is gathering pace in Frankfurt.
The German DAX index has just slumped through the 9,000 point mark for the first time in 16 months, down 3.2%.
Germany's DAX index falls below 9,000 for the first time since Oct. 2014 https://t.co/OQRPoHvpvZ
1.17pm GMT
Stock market wizards like to tell you that 'buy and hold' is a solid strategy, that allows shareholders to ride out turbulence.
Shares outperform other assets in the long term, they chant.
Grelapse.
Greek stocks slump to lowest level in quarter of a century. Athens index 469 points pic.twitter.com/X08Utd2XTp
1.01pm GMT
China has lost its claim to be the world's fastest-growing major economy, to India.
12.22pm GMT
Almost every company on the FTSE 100 index has fallen this morning, during another bout of heavy selling across Europe's stock markets.
Worries over the state of the world economy continue to drive shares lower.
A slow start soon turned disastrous this Monday, with many of the European indices plunging to lows not seen since October 2014.
With Citigroup warning of a potential 'death spiral' if investors behave irrationally to the stronger dollar/weaker commodities/harmed emerging markets cycle that the world appears to be trapped in at the moment, the markets have taken another kicking this Monday. It doesn't help, of course, that the day's economic calendar is so sparse, with investors left pondering the purely negative side of things as the morning continued.
12.12pm GMT
The FT's Joel Lewin has a handy explanation of why bank shares are falling today.
Fears surrounding non-performing loans and other deep-rooted issues in the Italian banking sector have driven nerves, while a slew of weak earnings from large banks such as Credit Suisse and Deutsche Bank have added to concerns.
Weak growth provides an unsupportive backdrop, as does the possibility of more deeply negative benchmark interest rates.
11.55am GMT
In another sign of angst, the gold price has just hit a three month high.
11.48am GMT
The OECD think tank has issued new economic indicators for investors to digest (in between hammering the SELL button).
It sees 'tentative' signs that the Chinese economy is bottoming out, but slowing growth in the US.
#Indicators pt to #growth stabilising in Brazil & China, firming in India, easing in UK & US https://t.co/38E3GDpFzm pic.twitter.com/hDskGphcsD
In the euro area as a whole, and in Germany and Italy, the composite leading indicators signal stable growth momentum while in France the outlook is for firming growth."
11.37am GMT
How worried should we really, really be about a global recession?
No-one knows for sure. But investment bank Goldman Sachs reckons it is still unlikely, despite fears that the recent market turmoil will feed into the 'real economy'.
"The recent market weakness should provide good risk-adjusted opportunities for those brave enough to defy Mr. Market's gloomy prognosis about the world economy."
11.19am GMT
The Greek stock market is still falling, and now down over 6%. That's pretty worrying, given the political tensions in Athens.
#Greek stock exchange at ...orange alarm #Grexit level. Recently recapitalized banks tumble. Political instability, elections risk.
11.12am GMT
Wall Street is expected to suffer losses when trading begins in New York, in just over three hours time.
11.04am GMT
The oil price is falling again, hit by concerns over the global economy.
Brent crude has dropped by 1.7% to $33.47 per barrel, wiping out last week's rally.
Oil is back down around $30 https://t.co/da1Yn1zKe7 pic.twitter.com/vjaxIYKwit
10.59am GMT
Confirmation that Germany's stock market is at a 15-month low:
Ouch! #Germany's Dax drops to lowest since Oct2014 as signs of distress in financial markets gathering force. pic.twitter.com/ZWIAYZ9uyJ
10.58am GMT
The Greek stock market has slumped by 5% to its lowest level since 2012 - when it nearly left the eurozone.
That's partly due to the general wave of worry today, but it also reflects the standoff over Greece's bailout.
Athens Stock Exchange -4.99% Ouch #Greece #ASE
10.50am GMT
European banking shares are bearing the brunt of today's rout.
In Germany, shares in Deutsche Bank have tumbled by 4.35%.
Deutsche Bank CDS :O pic.twitter.com/G1o9Z9VRDB
10.31am GMT
As shares slide, investors are scrambling to get their hands on safe-haven assets such as German government debt today.
And that has driven the yield, or interest rate, on German bunds into deeper negative territory.
schatz!? new record low, -0.511% pic.twitter.com/3Nx1eyUHA8
10.14am GMT
A wave of selling is gripping Europe's stock markets, as this morning's stream of bad news hits traders.
In London, the FTSE 100 index is suddenly down by 101 points, or 1.7%.
Stock markets in Europe are in full retreat... with the disappointing Sentix figures triggering a mid-morning selloff.
9.57am GMT
More gloom! Economic sentiment among investors across the eurozone has fallen sharply this month, as the problems in the global economy hit Europe.
Sentix, the Frankfurt-based think tank, has just reported that its index of investor morale has hit a 10-month low in February, dropping from 9.6 to 6.0.
The euro zone proves it is not immune to the enormous loss of momentum in the global economy.
The global economy is thus currently on the brink, led by a US economic downturn!
#Eurozone | Feb Sentix Investor Confidence Expectation Survey: 1.5 v 6.3 pic.twitter.com/dEHOPh9TMx
9.46am GMT
Wall Street bank Citigroup has contributed to the sombre feeling in the markets, with a research note last week warning that we could face a 'death spiral'.
The bad news, according to Citi, is that the dollar could keep strengthening, driving commodity prices lower, hurting emerging markets (EM), and thus pushing the dollar higher etc etc.
"The world appears to be trapped in a circular reference death spiral," Citi strategists led by Jonathan Stubbs said in a report on Thursday.
"Stronger U.S. dollar, weaker oil/commodity prices, weaker world trade/petrodollar liquidity, weaker EM (and global growth)... and repeat. Ad infinitum, this would lead to Oilmageddon, a 'significant and synchronized' global recession and a proper modern-day equity bear market."
Recession or... 'death spiral'? Citi strategists think the latter https://t.co/a5It6IK4fn pic.twitter.com/bQRy0WCTSr
This Citi thing is a crock. 'Oilmaggedon' is the tagline, but suggest you buy oil stocks for a bounce.
9.24am GMT
The Economist Intelligence Unit is also concerned about the economic situation.
Their managing director, Robin Bew, tweets that they think UK interest rates will remain at 0.5% until 2019
New survey shows #UK business confidence at 3 year low. We're about to tweak our interest rate forecast - no rise for another 3 years
9.19am GMT
In another sign of unease, shares in UK chipmaker ARM Holdings have slipped by 4% to the bottom of the FTSE 100 leaderboard.
8.54am GMT
Peter Elston, chief investment officer at Seneca Investment Managers, argues that we're unlikely to be entering a recession yet.
Recessions generally start because central banks are trying to restrain economies, he told Bloomberg TV this morning. But right now, inflation pressures are very low, and economies are still some way from full capacity.
"This would be an extremely unusual place for a global recession to start."
8.32am GMT
Shares in engine maker Rolls Royce have shed 2% at the start of trading, as the City braces for further problems.
The company has been hurt by cuts to defence spending by western governments, a fall in demand for corporate jets, and a slump in the oil price.
Related: Rolls-Royce to cut dividend payouts
8.24am GMT
European stock markets have begun the new week rather gingerly.
The FTSE 100 index has gained 20 points, or 0.4%, but Germany's DAX is only up 0.1% and the French CAC is slightly lower.
8.17am GMT
This fall in UK business confidence will only fuel concern that the global economy is slowing.
Chris Weston of financial spread-betting firm IG says this is the biggest issue in the markets today.
Will we see a recession in the US and other developed nations? There is little doubt this is the number one question being asked right now.
The strong fear is this stress - that is clearly being felt in the financial markets - will start to filter through to Main Street.
8.02am GMT
We have some worrying news to start the week -- confidence among UK executives has hit its lowest level since 2013.
Concerns over Britain's upcoming EU referendum are adding to worries over the global economy. And business leaders now fear their companies are suffering.
"Global headwinds are finally hitting business confidence and the added uncertainty of EU referendum just round the corner is fuelling concerns.
UK economy growing steadily but business confidence slips to a three year low is this morning's UK economic news
The BDO measure of business confidence at 3 year low but its current output & employment measures rise; Lloyds Bank regional index also up.
7.40am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
It looks like a quiet start to the week, as investors wait to hear from Federal Reserve chair Janet Yellen.
"She may emphasize the positives in the U.S. economy, particularly the still-strong labor market.
Looking ahead, she may sound more cautious, and she will likely highlight that the negatives are mostly from abroad and that they are watching the global picture closely."
Janet Yellen to Balance Confidence With Caution in Testimony https://t.co/j6cEjP4wOR via @business pic.twitter.com/6f2VoydmAZ
Our European opening calls:$FTSE 5888 up 40
$DAX 9327 up 41
$CAC 4222 up 21$IBEX 8512 up 12$MIB 17315 up 64
