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19-Oct2018

US markets decline on Thursday on worries about global growth

The US markets declined on Thursday on rising worries over US-Saudi relations after the suspected murder of journalist Jamal Khashoggi and unease over the eurozone due to Italy's controversial budget plans. Sentiments remained under pressure after Treasury Secretary Steven Mnuchin announced he was withdrawing from a big investment summit in Saudi Arabia, the most concrete sign the Trump administration is distancing itself from Saudi Arabia since Khashoggi's disappearance this month intensified scrutiny of the big oil exporter. Besides, European Central Bank chief Mario Draghi reportedly told EU leaders at a Brussels summit that nations should adhere to the EU's budget rules - comments that were seen as a swipe at Italy, which plans a steep increase in deficit spending. However, investors overlooked solid earnings reports.

On the economic front, the Labor Department's report showed a modest decrease in first-time claims for US unemployment benefits in the week ended October 13. The report said initial jobless claims slipped to 210,000, a decrease of 5,000 from the previous week's revised level of 215,000. A separate report released by the Federal Reserve Bank of Philadelphia showed manufacturing activity in the Philadelphia area grew at a slightly slower rate in the month of October. The Philly Fed said its diffusion index for current general activity edged down to 22.2 in October from 22.9 in September, although a positive reading still indicates growth in regional manufacturing activity. Meanwhile, the Conference Board released a report showing its index of leading US economic indicators increased in line with street estimates in September. The Conference Board said its leading economic index climbed by 0.5% in September after rising by 0.4% in August.

Dow Jones Industrial Average declined 327.23 points or 1.27 percent to 25,379.45, Nasdaq slipped 157.56 points or 2.06 percent to 7,485.14 and S&P 500 was down by 40.43 points or 1.44 percent to 2,768.78.


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