US stocks skid on fears about British financial system

NEW YORK (AP) — U.S. stocks are falling Tuesday morning as investors worry about the British financial system. Yields on U.S. government bonds are plunging. Banks are taking the largest losses, and energy companies are falling with the price of oil.

KEEPING SCORE: The Dow Jones industrial average fell 106 points, or 0.6 percent, to 17,843 as of 10:02 a.m. Eastern time. The Standard & Poor’s 500 index slipped 16 points, or 0.8 percent, to 2,087. The Nasdaq composite lost 43 points, or 0.9 percent, to 4,819. The market is coming off its best week since November, and U.S. markets were closed Monday for the Independence Day holiday.

UK JITTERS: Financial group Standard Life stopped trading in a commercial property fund after a rapid increase in investors trying to liquidate their holdings. That hurt real estate stocks in Britain and reawakened concerns that the exit from the EU could destabilize the country’s financial system or economy. The Bank of England later said it had eased bank rules to allow them to lend up to 150 billion pounds ($200 billion) more to households and businesses.

The pound fell to $1.3075 from $1.3259 on Tuesday, its lowest since the vote and the weakest in 31 years.

BONDS, BANKS: Bond prices climbed and the yield on the 10-year Treasury note dropped to 1.38 percent from 1.45 percent late Friday. Lower bond yields translate to lower interest rates, and that hurts bank profits on loans such as mortgages. Citigroup lost 94 cents, or 2.2 percent, to $41.23 and Goldman Sachs fell $2.59, or 1.7 percent, to $145.66. Capital One gave up $1.58, or 2.5 percent, to $61.39.

ENERGY: Benchmark U.S. crude sank $1.68, or 3.4 percent, to $47.31 a barrel in New York. Brent crude, used to price international oils, fell $1.60, or 3.2 percent, to $48.50 a barrel in London. That pulled energy companies lower. Halliburton shed $1.53, or 3.4 percent, to $44.03 and Schlumberger retreated $1.67, or 2.1 percent, to $77.85.

SAFETY: Investors once again looked for safe investments, and the types of stocks that are generally considered the safest all traded higher. Utility and phone companies rose about 0.4 percent and household goods maker are down 0.3 percent.

PRECIOUS METALS: The price of gold rose $15.10, or 1.1 percent, to $1,354.10 an ounce. Silver added 50 cents, or 2.6 percent, to $20.09 an ounce. Silver hasn’t closed above $20 an ounce since August 2014.

HERE WE GO AGAIN: Stocks took a steep two-day plunge last month after Britain voted to leave the European Union last month. Over the last four days they recovered almost all of the ground they lost after the vote. Tuesday’s skid shows investors haven’t put all of their worries behind them.

OVERSEAS: Outside the U.S., stock indexes were mostly lower. France’s CAC 40 fell 1.8 percent and Germany’s DAX also dropped 1.8 percent. However Britain’s FTSE 100 picked up 0.5 percent. Japan’s benchmark Nikkei 225 slipped 0.7 percent to finish and South Korea’s Kospi fell 0.3 percent. Hong Kong’s Hang Seng dipped 1.4 percent.

EUROPE ECONOMY: A survey showed that business activity in the eurozone slowed to a 17-month low in June. That was before the British vote to leave the EU. Economists said the drop reflects some uncertainty as the vote approached, but it’s also likely to drop in coming months as a result of the vote’s outcome.

OTHER CURRENCIES: The dollar fell to 101.64 yen from 102.58 yen. The euro rose to $1.1146 from $1.1125.


AP Markets Writer Marley Jay can be reached at . His work can be found at

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