Global Stocks, U.S. Futures Tumble on Tech Selloff: Markets Wrap

Samsung Electronics Co. and Tencent Holdings Ltd. had the biggest declines in the MSCI Asia Pacific Index, dragging down tech shares from the highest level since 2000, while ASML Holding NV paced losses in Europe. U.S. equity futures slumped as Amazon.com dropped in after-hours trading. The yen strengthened against the dollar, while the euro rallied to the highest since January 2015 against the Swiss franc.

U.S. stocks have rallied to records amid signs of solid economic growth globally and as more than three-quarters of S&P 500 companies have delivered earnings that beat forecasts. Technology shares have led the charge, with companies soaring 22 percent this year for the best performance among 11 groups in the S&P 500. The sector trades at an average 19 times projected earnings.

“With Amazon’s earnings falling short of estimates, the U.S. market may readjust its expectations,” Hideyuki Ishiguro, a senior strategist at Daiwa Securities Co. in Tokyo, said. “Investors are becoming increasingly wary over the historically low volatility levels, with a host of key economic data coming out in the U.S.”

Stocks were rattled in the U.S. on Thursday after JPMorgan Chase & Co. derivatives strategist Marko Kolanovic said the market’s volatility drought could presage protracted histrionics. Attention remains on corporate results ahead of a report on U.S. second-quarter growth. Financial markets have fluctuated this week following a Federal Reserve statement indicating concern about inflation. Policy makers are expected to begin reducing the Fed’s $4.5 trillion balance sheet in September even as they avoid rushing to raise interest rates.

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Here are some key events that wrap up this week:

The U.S. economy probably accelerated in the second quarter to a 2.5 percent annualized pace, fueled by a pickup in consumer spending after a slowdown at the start of the year. Corporate results due Friday in the U.S. include Exxon Mobil Corp.

Stocks

The Stoxx Europe 600 Index fell 0.8 percent as of 8:14 a.m. in London, with technology shares dropping 1.6 percent. The MSCI Asia Pacific Index dropped 0.6 percent, erasing its gain for the week. Tech shares in the gauge fell 1.5 percent. Futures on the S&P 500 Index declined 0.2 percent, while Nasdaq futures lost 0.7 percent. South Korea’s Kospi index slumped 1.7 percent, the most since November, with Samsung tumbling 4.1 percent. Hong Kong’s Hang Seng Index lost 0.5 percent, with Tencent dropping 0.9 percent. Benchmark indexes in Australia, Taiwan and Singapore were down more than 0.7 percent. The Shanghai Composite Index rose 0.1 percent. Japan’s Topix index fell 0.4 percent. Data on Friday showed that while household spending in Japan rose 2.3 percent, its first gain in more than a year, Japan’s key price gauge was unchanged in June.

Currencies

The yen rose 0.1 percent to 111.10 per dollar, leaving it little changed for the week. The euro strengthened 0.2 percent to $1.1702. It gained 0.5 percent to 1.13259 Swiss francs, climbing for a fourth day. Read more about the euro-franc pair’s move here. The Bloomberg Dollar Spot Index retreated 0.1 percent after rallying 0.4 percent on Thursday. The gauge is flat for the week. The British pound gained 0.1 percent. The South Korean won slumped 0.8 percent.

Bonds

The yield on 10-year Treasuries slid one basis point to 2.30 percent. French, German and U.K. 10-year yields lost one basis point. 10-year Australian government notes were steady at 2.68 percent.Commodities

West Texas Intermediate was little changed at $49.03 a barrel. Oil is up 7.1 percent for the week, its best performance since the end of June, as sliding U.S. inventories and signs of stronger demand raise speculation a supply glut in the world’s biggest consumer may ease. Copper fell 0.3 percent after a five-day rally. That pared the week’s gain to 5.1 percent, still the best performance since early February. Gold was little changed at $1,259.68 an ounce. The precious metal is on course for a third week of gains.