U.S. stocks opened sharply lower on Friday, following a global decline in equities on renewed Greece concerns and new Chinese trading regulations, amid U.S. inflation and consumer data.
“I think what’s more market moving (than domestic data) is Europe and concerns about Greece, and the put trading rules (in) China,” Jim Meyer, chief investment officer at Tower Bridge Advisors.
Meyer said the negative reaction in equities and futures was more of an “aftershock.” “It should really affect us at all. The Chinese market has been an unusual source of strength,” he said. “In a very quiet market on a Friday it doesn’t take much to move the market.”
Major European stock indices were down about one percent or more, following a selloff in Chinese futures over news of coming government regulation to expand short-selling and limit over-the-counter margin trading.
“We know on Monday China has potential being down a lot,” said Peter Boockvar, chief market analyst at The Lindsey Group. “Greece is an issue again.”
Focus for European markets has been on Greek Finance Minister Yanis Varoufakis’ visit to meet IMF officials, as investors become increasingly nervous about the funding crisis in Greece.
German bund yields dipped below 0.05 percent, Reuters said. Italian, Spanish and Portuguese 10-year bond yields jumped by more than 5 percent.
Boockvar noted that the selloff in U.S. index futures and European equities came within an hour after Chinese stock futures fell around 5 a.m. ET Friday morning. U.S. stocks are also near levels of resistance at the high end of the recent trading range of 2,040 and 2,120 on the S&P 500, he said.
“The S&P futures are lower this morning on the back of weakness overseas,” BTIG’s Chief Technical Strategist Katie Stockton said in a note. “The pullback follows new all-time highs in small- and mid-cap indices, although the SPX has yet to follow suit. We think a brief pause will allow for a breakout, noting the DeMark indicators support about four days of consolidation. We think a bullish bias is appropriate with breakouts far outnumbering breakdowns among individual stocks.”
Futures held lower but above morning lows after the consumer price index showed an increase of 0.2 percent in March, below expectations of 0.3 percent.
However, the figure marked the second-straight month of gains and matched February’s 0.2 percent gain. Core CPI, excluding food and energy, came in slightly above expectations at 0.2 percent, the same level as in February.
“Bottom line, the decline in CPI is all energy and the core rate has been running between 1.6 to 2 percent since the middle of 2012 (when it was running above 2 percent) driven by services inflation led by rents,” Boockvar said in a note. “The deflation argument I believe is nonsense and if energy prices just stop going down, then we’ve seen the bottom in the inflation stats.”
Among the few earnings reports before the bell, GE’s adjusted earnings beat by a penny a share, but revenue came in light.
The Dow Jones Industrial Average traded down 154 points, or 0.85 percent, at 17,952, with American Express the greatest laggard and General Electric the only advancer.
The S&P 500 traded down 12 points, or 0.57 percent, at 2,092, with energy leading all sectors except utilities lower.
The Nasdaq traded down 35 points, or 0.68 percent, at 4,973.
For every five decliners one stock advanced on the New York Stock Exchange, with an exchange volume of 125 million and a composite volume of 237 million in early trade.
The U.S. 10-year Treasury yield was 1.91 percent. The U.S. dollar edged higher against major world currencies, with the euro lower at $1.07.
Crude oil futures fell 43 cents to $56.28 a barrel on the New York Mercantile Exchange. Gold futures gained $4.60 to $1,202.60 an ounce as of 9:40 a.m.
Trading was affected in Europe and Asia Friday morning by an outage on Bloomberg’s trading terminal, with some users saying they were unable to perform their usual trading activity. By 4:10a.m. ET, the company said that some customers had reported the terminal was back online. (Disclosure: Bloomberg is a competitor of CNBC.)
—Reuters and CNBC’s Patti Domm contributed to this market report.
On tap this week:
10:00 a.m.: Consumer sentiment