Global stocks enter bear market after another rout - as it happened
Federal Reserve chair Yellen has told senators that negative interest rates are being examined, as shares slide in Europe and the US
- Latest: Wall Street finishes down again
- WSJ: OPEC ready to co-operate on oil cut
- Highlights: Yellen in front of Senate
- Yellen: Negative rates aren't off the table
- Summary: Market hit again as banks slide
10.01pm GMT
That's an appropriate moment to stop. Back tomorrow, for another day of market drama - plus the latest eurozone growth figures, starting with France at 6.30am GMT.
Here's our latest news story:
Related: Stock markets hit by global rout raising fears for financial sector
9.44pm GMT
Today's selloff in Asia, Europe and America have pulled global stocks into bear market territory.
Reuters has the details:
Stock indexes worldwide stumbled on Thursday on fears over the health of the global economy, with a global equity benchmark index closing the day more than 20 percent below its record high last May, confirming global stocks are in a bear market.
MSCI's all-country world equity index which tracks shares in 45 nations, was last down 4.73 points, or 1.32%, to 353.35. The index hit its lowest level in more than two and a half years and was down 20.18% from an all-time high close of 442.70 on May 21, 2015.
MSCI Index falls 20% as global stocks enter bear market
9.32pm GMT
It looks like the S&P 500 has finished at its lowest closing level since April 2014, at 1829 points.
9.20pm GMT
The Dow has lost around 4.6% of its value since last Thursday - the last time it posted a daily rise.
The index is down 10.1% since the start of this year.
9.15pm GMT
This is the fifth day running in which the Dow Jones index has lost ground.
5 red in a row for the DJIA. Worst since late August when we went 6 in a row
9.12pm GMT
Reminder: Tonight's losses in New York follow another day's torrid trading in Europe.
Britain's FTSE 100 has another day to forget, losing 2.4% as investors raced for safe-haven assets such as German bonds, the yen, and gold.
9.06pm GMT
Phew! America's stock market has closed for the night, and the main three indices are all in the red.
The Dow ended the day down around 251 points, having clawed back from a 400-point loss an hour or so ago.
8.56pm GMT
The latest research note from French Bank BNP Paribas just landed in my inbox.
Here's their 'big picture' view:
Central-bank action looks uncoordinated and we see few signs of calm ahead. We expect no further action from the Fed in 2016 or 2017 and we think central banks across the world will continue to adopt easier policies in response.
8.41pm GMT
It looks like traders are trying to give the Dow a late push. It's now down 188 points, or half its earlier losses.....
I think I can. I think I can... still down triple digits, though https://t.co/JfRvj802Ph pic.twitter.com/87Rd2GlUY4
8.40pm GMT
Hello hello.... look at the Nasdaq.
The tech stock-heavy index has shrugged off its earlier losses, and is now up 7 points (or 0.2%).
8.21pm GMT
Now that today's OPEC rumour has sunk in, Wall Street is still in red, but off its lowest levels.
The Dow is currently down 273 points, or -1.7%, with just 40 minutes until the closing bell.
8.08pm GMT
This is the story that moved the market a few minutes ago, by Summer Said of the Wall Street Journal.
OPEC members are ready to cooperate on a cut, but current prices are already forcing producers outside the group to at least cap output increases, says UAE Energy Minister Suhail bin Mohammed al-Mazrouei.
Non-OPEC supplies are expected to drop up to 800K barrels/day while global demand growth is seen at 1.3M-which will help the market balances itself.
OPEC is ready to cooperate on a cut, but current prices are already forcing non-opec producers to at least cap output, says UAE Energy min
Markets jump higher after report that OPEC may ready to cooperate on reducing output https://t.co/MBAw8zhxAn pic.twitter.com/3yEAf65Y2j
7.49pm GMT
Energy stocks are suddenly spiking, pulling the US stock market off its lowest levels.
And it's triggered reports that the energy minister of the UAE has said Opec members are "ready to co-operate" on production cuts.
Dow off less than 300 points after DJ reports OPEC members ready to cooperate on cut, oil turns sharply higher. https://t.co/xemN29Hklb
7.43pm GMT
Wow. The Dow just lurched through the 400-point loss mark, as news of the latest tumble in the oil price broke. Then it ricocheted back, to "just" 340 points down in a few moments.
market is trading like a pinball machine
7.36pm GMT
Oil has just plumbed new depths, as oversupply fears and global recession worries take their toll again.
West Texas Intermediate (US crude oil) has sunk below $26.19 per barrel, to hit the lowest levels since May 2003.
BREAKING: Oil breaks 2003 low of $26.19 https://t.co/hPntfHJDOb
7.26pm GMT
7.23pm GMT
There's no let-up in the market gloom today, with the Dow Jones industrial average still down over 2%.
The Dow is currently trading at 15,570, a loss of 344 points. Only two stocks are up - network equipment vender Cisco, and entertainment group Walt Disney (who posted strong results earlier this week).
7.12pm GMT
Two months after the first US rate rise in a decade, the financial markets reckon the Fed is more likely to CUT, rather than risk a second hike.
This is a terrific chart: #Fed rate cut seen as more likely than hike https://t.co/79qKMH68vj via @markets pic.twitter.com/0odm8y2dW0
6.55pm GMT
Kit Juckes, top currency strategist at Societe Generale, reckons that the market turmoil has been sparked by a loss of faith in central bankers.
In a new note to clients, he writes:
We've relied on central bankers to fix all the world's woes, when all they could really do was to get the global financial system back on an even keel. Keeping policy too easy for too long and boosting asset markets in the vain hope that this would deliver a sustainable demand pick-up has meant that even a timid attempt at normalising Fed policy has caused two months of mayhem. Now, a growing realisation that central banks' powers are waning has prompted a rush into safe havens.
We're just getting the stickers saying 'Easy Money may cause harmful side-effects if consumed persistently for long periods' printed....
6.08pm GMT
6.07pm GMT
Yellen's second and final testimony ends with chairman Richard Shelby suggesting a review of the Fed's structure. She seems unconvinced but says it is up to Congress. And with that it's over.
5.49pm GMT
A cocktail of concerns has sent markets tumbling again. Worries about a severe global economic downturn, stresses on bank balance sheets, the falling oil price and Federal Reserve chair Janet Yellen's comments about the impact of a slowdown and the market turmoil on the US economy have sent investors scurrying away to havens such as gold. Yellen's comments about negative interest rates added to the unease as the afternoon wore on. The final scores in Europe showed:
5.22pm GMT
Charles Schumer of New York says the strength of the US dollar is another form of rates rise so another hike would be a double whammy for the economy.
Yellen says the dollar is a factor in interest rate policy, but says although some sectors have been hit by the strength of the US currency the economy has managed to continue creating jobs.
5.06pm GMT
Heller: A year ago you said falling oil would be good for the economy. Do you think you made a mistake.
Yellen: Clearly declining oil prices have had some negative effects [on the economy].
5.04pm GMT
Dean Heller of Nevada: Different Fed officials saying different things causes confusion to public and markets. Do you see a problem?
Yellen: Congress created a system with a large committee with diverse views so we did not fall into groupthink mentality. We have 17 members with a range of views.
4.49pm GMT
Yellen is asked again about the rate rise at the end of last year.
Yellen: We felt in December the economy was moving up and inflation would go up.
4.41pm GMT
Elizabeth Warren of Massachusetts asks about living wills for banks, which are designed to make sure if they fail there will not be a systemic risk, and says there are 11 where they were deemed not to be sufficient and have been resubmitted.
Yellen: We gave detailed guidance about what we want to see in these latest rounds of living wills. We are..evaluting them.
4.35pm GMT
Tom Cotton of Arkansas asks the December rate rise, and Yellen says the Fed wanted to move gradually so that the economy remained on a sustainable growth path.
Cotton then asks about when she expects energy prices and the dollar to stabilise.
4.24pm GMT
Pat Toomey of Pennsylvania: I wanted the Fed to normalise policy [ie start raising rates again which happened in December]. Markets now appear to price in no further increases in interest rates. But what are the risks of negative rates? [He lists several including pressure on banks, the prospect of currency war, an effective tax on savings and so on]
Yellen: In European countries which have [introduced negative rates], I was surprised it was possible to take them as negative as they did. Don't think they pass on negative rates to small depositors, which means bank's margins are squeezed.
4.07pm GMT
Question from Bob Corker of Tennessee : Is Fed out of ammunition unless you go to negative rates? If things go south are you considering negative rates?
Yellen: The answer is we had previously considered them and decided they would not work well back in 2010. In light of others [introducing them], we are taking a look at them again because we would want to be prepared. We have not finished that investigation. Not automatic they would work well here.
3.58pm GMT
Senator Jon Tester of Montana: What is Fed seeing in housing sector right now?
Yellen: We are seeing recovery in housing, it has gone on for a number of years but is very gradual. House prices have increased quite a bit. [But] the level of new construction remains quite low relative to demographic trends. Quite a significant way for housing to go before it is consistent with demographic trends. It is a support to the economy.
3.53pm GMT
Senator Mike Crapo asks: Would you agree liquidity in bond markets may be less available in stressed market conditions.
Yellen: Normal conditions haven't changed that much but perceptions suggest that under stressed conditions liquidity may disappear when its most needed. We are looking at these things...
3.42pm GMT
Asked about wages, she says a pick up in wage growth is tentative. She hopes as the economy improves this will increase.
3.40pm GMT
Chair Richard Shelby asks if the precipitous decline in the price of 0il and gas plus the rise of the dollar surprised the Fed or could you have predicted it?
Yellen says the Fed and the markets have been quite surprised by movements in oil price. In part they reflect supply isssue, demand may also play a role.
3.29pm GMT
Here's a chart showing how the chances of a Fed rate rise have dropped sharply since January in the wake of the market turmoil and Yellen's comments:
Probability of Fed Rate Hikes Now vs. January (There goes the plan) pic.twitter.com/lwJaxdgiuS
3.25pm GMT
3.19pm GMT
After opening comments from committee chair Richard Shelby and senator Sherrod Brown of Ohio, Federal Reserve chair Janet Yellen is currently delivering her testimony (identical to yesterday's speech remember).
Meanwhile markets seem to have recovered a little from their worst levels. Analyst Connor Campbell at Spreadex said:
Initially threatening a 300 point plunge when the bell rang on Wall Street the Dow Jones settled into a more solid, if still troublesome, 175 point drop as the open receded into the background. Whether or not the better than expected, and best since December, jobless claims helped (it probably didn't) is unclear, though at this point in time in the most worthless piece of positive news is likely appreciated by fear-stricken investors. The Dow was probably saved (and this is all relative, remember) by the fact that the blood loss endured by the US banking sector was nowhere near as gory as the scenes over in Europe, Bank of America the worst hit at around a 4% decline.
In Europe things were much the same, i.e. not too good at all. The FTSE just about managed to claw its way back to the 5600 mark, arguably thanks to the fact that Brent Crude is now closer to $31 per barrel than it is to $30. The DAX, meanwhile, tucked under a 2% decline around 40 points away from 8900, whilst the CAC climbed down from its 3.7% nadir to post a 2.7% loss, both indices aided by a (minor) reduction in losses form Deutsche Bank and Societe Generale respectively.
3.04pm GMT
Federal Reserve chair Janet Yellen is back on Capitol Hill to discuss the global outlook and monetary policy with the Senate Banking Committee, the second and last day of her testimony to Congress.
The hearing has begun and can be viewed here.
3.03pm GMT
Elsewhere Morgan Stanley has agree to pay $3.2bn relating to the sale of mortgage-backed bonds before the financial crisis.
2.46pm GMT
Ahead of Yellen's testimony, some think it is time for a US rate cut:
Global demand collapsing stock markets tumbling & US economy heads into recession not least down to fomc raising rates in Dec time for a cut
2.40pm GMT
As predicted, the US market has followed the rest of the world lower.
The Dow Jones Industrial Average is down 243 points or 1.5%, while the S&P 500 has lost 1% and Nasdaq 1.3%.
2.37pm GMT
Meanwhile the International Monetary Fund has confirmed that Christine Lagarde has been nominated for a second five year term as managing director unopposed.
Her first term ends in July.
2.33pm GMT
Well, here's the answer to the question about whether Janet Yellen would change her testimony from Wednesday's remarks in the light of the day's renewed market turmoil.
No.
2.29pm GMT
2.26pm GMT
Here's some comments on Portugal and Greece from Slovakia's finance minister Peter KaA3/4imir ahead of the eurogroup:
We shouldn't overreact on #Portugal. Country has done lot of work over past few years. There's no reason to panic & jump to conclusions. #EU
Lisbon, however, needs to stand ready to adjust 2016 budget should situation require it. #eurozone #Portugal #EU #budget #Eurogroup
On #Greece. We will be briefed on state of play. Talks between #Athens & creditors continue #eurozone
We've seen progress in talks, but we need to move closer towards finalizing of open issues. Pension reform for example #Greece #eurozone #EU
2.17pm GMT
Bloomberg points out another possible reason behind the plunge in bank shares:
When looking for drivers of the bank equity rout, don't forget about oil-state funds https://t.co/TA0LwXLjFt pic.twitter.com/5OPm62wWUq
2.07pm GMT
Now here's a key question about today's second testimony from Federal Reserve chair Janet Yellen:
Will #Fed #Yellen change her prepared monetary policy testimony today to account for plunging markets?
1.55pm GMT
Over in Brussels, eurozone finance ministers are telling reporters that the European banking sector is in good shape, as they arrive for a Eurogroup meeting.
Eurogroup president Jeroen Dijsselbloem revealed that ministers will consider the market turbulence during today's session.
Eurogroup chief @J_Dijsselbloem - banks in 'much better place' than a few years ago. Nothing to see here
Eurogroup will discuss volatility of EU bank shares today, says @J_Dijsselbloem
*MOSCOVICI SAYS EU BANKING SYSTEM STRONGER THAN BEFORE
Eurozone banks: 'it doesn't worry me at this particular moment... we should be pretty relaxed' says Finland's @alexstubb
Finnish FinMin Stubb says situation of Eurozone banks "isn't on the [Eurogroup] agenda and shouldn't be. We should be pretty relaxed".
1.35pm GMT
Out of the mists of gloom comes some good news, in the shape of the weekly US jobless figures.
They show that the number of Americans filing new unemployment claims fell by 16,000 last week, to a seven-week low.
1.22pm GMT
World stock markets are gripped by another bout of feverish selling today.
"February has continued much like January begun, with markets yo-yoing and investor sentiment swinging from one concern to the next. The FTSE 100 broke the 5,500 barrier today - hitting a new low since July 2012.
"Investors can't be blamed for feeling unnerved. There is a cocktail of worries clouding the investment horizon from a slowing China, emerging market rout, the unprecedented collapse in the oil prices and more recently, the problems brewing in the banking sector.
European banking shares down 6% today, hitting lowest point since August 2012 https://t.co/B9c0wkpMkV pic.twitter.com/zeRkp9Mw5E
12.34pm GMT
Financial sentiment right now:
Good morning, markets pic.twitter.com/FcTRVN8d07
As US investors get to their desks.... pic.twitter.com/Z2qIBdHlKE
12.29pm GMT
A rumour is sweeping the trading floors that the Bank of Japan has intervened to weaken the yen, following today's surge against the US dollar.
And the yen has weakened, moving from 111.5 to 112 against the $1.
Volatile #JPY chatter of "intervention"? #BOJ #USDJPY AB
12.17pm GMT
America is waking up to the news that Asian and European markets have taken another bath this morning. And they are next in line:
This is how U.S. futures are looking right now https://t.co/4hM5fHBxdc pic.twitter.com/mmpWTdEY0c
12.10pm GMT
Investors are ditching Portuguese government bonds this morning, as the financial turmoil grows.
A nice lil chart for the eurogroup to mull over this afternoon #Portugal pic.twitter.com/eTX1Ag1XdX
Everyone rushing for the exits. Portuguese 2-year yield now up 160% on the day. 10-year up an astonishing 20%, worse than worst days in 2011
11.49am GMT
Joshua Mahony, market analyst at IG, reckons fear is driving shares down today, rather than a fundamental shift.
The fear surrounding global financial markets has been cranked up further today, as risk assets once more took a battering in favour of defensive plays.
The continued deterioration in the FTSE is as much to do with the ongoing fall in oil and the fall in the US dollar against the yen, as the outlook for the UK economy itself, yet with markets in freefall, who is going to argue with a trend?
11.48am GMT
There are many potential causes of the current rout.
For example: signs of slowing global growth; fears that negative interest rates severely undermine bank profitability; the bad loans lurking in the European financial sector; suspicions that China is much weaker than the GDP figures show....
Something very surreal about these dramatic market moves. No investor I've spoken to has any sense of panic. Nor any explanation.
11.38am GMT
In a morning of wild and alarming moves, one stands out.
The Japanese yen has jumped by 1.7% against the US dollar today, strengthening from 113.3 to $1, to 111.5.
The US dollar printed a fresh 16-month low against the Japanese yen, suggesting that traders believe the BoJ will be unable to further weaken the yen, while betting the Fed will remain sidelined for a longer period of time.
11.23am GMT
Here, courtesy of David Buik of Panmure Gordon, is a snapshot of the day's rout (so far) in the banking sector:
10.53am GMT
Britain's borrowing costs have now hit their lowest level since the late 1600s, thanks to the plunge in bond yields today (details here).
So reckons Sky News's economics editor, Ed Conway, who has checked the historic data.
UK govt cost of borrowing (10yr gilt) is down to 1.3%. Lowest rate since govt debt markets created in 17th century pic.twitter.com/0QvGcmHdGB
It can be difficult to identify medieval interest rates, in part because interest charges had to be disguised to circumvent the Church prohibition on usury, but we found that the king could borrow at 15% annualised interest when his finances were stable but that this could increase to more than 40% during periods of financial pressure, most notably during wartime.
Edward I probably had a surplus on his account with the Ricciardi, who collapsed as the result of a 'credit crunch' caused by the unexpected outbreak of war between England and France.....
10.35am GMT
The Greek stock market is suffering another rout, led by its banks:
#Greece Athens stock exchange -5.23%, banks -18.31%. Banks -69% year to date
#Greece Banks, year to date: Alpha Bank -53.4%, NBG -62.97%, Piraeus -67.63%, Eurobank -67.79%
10.16am GMT
Oil is being thumped by predictions of a growing crude glut, as the world economy slows.
The price of US crude has fallen by almost 3% today, to $26.74 per barrel.
The threat of further rate hikes from the Fed coupled with diminished prospects for a joint production cut between OPEC and non-OPEC producers have sent US oil prices back down to 12-year lows.
The renewed slump in the price of oil has been unfortunate timing for French oil giant Total to report a 20% rise in annual net profits which CEO Patrick Pouyanne proclaimed as the "best performance" amongst the oil majors.
9.39am GMT
Today's rout has driven European bank shares down to their lowest level in three and a half years.
The Stoxx 600 Banks index, which includes the main lenders in Europe, has shed 6.1% and is now at its lowest level since August 2012.
9.24am GMT
Britain's government borrowing costs have just hit an all-time low, according to Reuters data.
The yield on 10-year UK gilts, which are the benchmark for UK borrowing, has fallen to 1.29% this morning in a wave of buying.
9.13am GMT
Investors are scrambling into "safer" eurozone government bonds.
That's another sign that they're seeking protection against recession and market turmoil.
8.59am GMT
Bank shares are getting a tonking this morning.
Deutsche Bank, the source of so much worry, is down by 6.3% in Frankfurt, with Commerzbank close behind.
Europe getting creamed... European banking sector off almost 6%...not even an hour into trade @CNBC @CNBCi
8.54am GMT
After a rough start to trading, European stock markets are deep and turbulent sea of red.
Italy is the worst performer, with its FTSE MIB index slumping by over 4%:
Although the economic environment has transformed for the worst since the start of the year with ongoing China woes and violent declines in oil prices exposing the US economy to downside risks, in defiance the Fed continues to hold the view of raising rates at a gradual pace.
While Yellen also emphasized that financial conditions in the US have become less supportive of growth, this was counterbalanced with the impressive labour report which in the eyes of the Fed opened doors for a potential rate rise in March.
8.48am GMT
Wall Street is expected to take a tumble later today:
Nour Al-Hammoury, chief market strategist at ADS Securities in Abu Dhabi says:
Asia and Europe equities remain weak following the Feds acknowledgment that they have concerns over global markets. European financial risk indices continue to rise, which is keeping demand high for safe haven assets.
Ahead of the open we're currently calling the DOW down 275 15640 and the S&P down 32 at 1820
8.42am GMT
Sweden's central bank has cut the country's interest rates deeper into negative territory, in another sign of the turbulence in the financial world.
The Riksbank has just announced that the headline rate will fall to -.50%, from -0.35%.
The economy continues to strengthen but inflation is expected to be lower during 2016 than previously forecast.
The Riksbank cut to an interest-rate of -0.5% is because it is getting ahead of an expect cut by the ECB in March #Currencywars #Madness
8.33am GMT
Tony Cross, analyst at Trustnet Direct, says fears over the world economy are hitting shares hard, and also pushing the oil price down.
Any hopes that yesterday's modest rally for the FTSE-100 would mark something of a turning point have been dashed.
WTI crude oil prices tested territory below $27/barrel, whilst the return to work after the Lunar New Year break saw traders in Hong Kong lacked any signs of optimism. Janet Yellen's words yesterday have clearly done nothing to calm sentiment - yes the next US rate hike may have been pushed back, but the challenge now is managing the US recovery against a potential global slowdown.
8.31am GMT
The London selloff is accelerating, wiping 130 points off the Footsie.
The index of major blue-chip shares has now hit its lowest level since July 2012:
8.26am GMT
Over in Paris, French bank Societe Generale has plunged by 9%.
It missed City forecasts this morning, with net income coming in around 31% below analyst forecasts.
8.21am GMT
Money is pouring into safer assets, and out of shares.
The gold price has risen to $1,211 per ounce, its highest since May 2015.
And up go the havens...Gold & Yen continue to spike today. pic.twitter.com/DjHu0jIGiR
8.14am GMT
Down we go again!
European shares are falling at the start of trading. The FTSE 100 has shed 101 points, or 1.7%, to 5,570 points.
The weakness stems from Fed chair Janet Yellen warning on current financial market turbulence and suggesting further rate hikes could be delayed, which added to already raised anxiety about the health of the global economy to hold back risk sentiment.
7.58am GMT
It's never great returning to work after a holiday. But the mood in Hong Kong was particularly grim, as investors watched shares tumble.
"I think this is going to be a difficult year for investors and even a fledgling U.S. economic recovery looks to be snuffed out by global markets development."
"There is very little good news and continuous bad news and this is a test of market confidence."
7.46am GMT
Hong Kong's stock market is suffering its worst start to the Lunar New Year since 1994.
A wave of selling has hit shares as traders return to their desks after this week's holiday.
Hong Kong stocks fall after long holidayhttps://t.co/eqnIQLt8OO pic.twitter.com/nNUDL7naLo
Hong Kong stocks see the worst start to a Chinese New Year since 1994 https://t.co/IfLOkStTA2 pic.twitter.com/ipo3DQucd6
"What started in January as mainly China based worries has clearly broadened back out to concerns about global growth"
7.23am GMT
Good morning, and welcome to our rolling coverage of the world economy, the financial markets, the eurozone and business.
There's no end in sight to the market turmoil. European stocks are expected to fall at the start of trading, with worries over the global slowdown centre-stage again.
Our European opening calls:$FTSE 5615 down 58
$DAX 8876 down 141
$CAC 3995 down 66$IBEX 8018 down 126$MIB 16457 down 257
Related: Janet Yellen hints further rate rises on hold amid plunging markets
" Riksbank rates (0830GMT), Greek unempl (1000GMT)
" Eurogroup meeting of EZ finmins
" Yellen part 2
" UK MPs question Google &tax officials
