Stocks fell Tuesday after China's devaluation of its currency
signaled the government's growing worry about slow growth.
The move, which followed weak export and import data from China
over the weekend, marked the latest round in Beijing's efforts to
prop up its slowing economy. Concerns about the pace of global
growth this year have weighed on commodity prices and helped keep a
lid on U.S. stocks for the year. Weakening economic growth dims the
outlook for corporate profits and future gains in stocks.
China's devaluation boosted demand for safe-haven Treasury
debt.
"It's another step by the People's Bank to support the economy
and stabilize the economy, which continues to weaken," said Craig
Bishop, lead strategist of U.S. fixed-income strategies at RBC
Wealth Management. "A slowdown in an economy of that size causes a
lot of ripples."
S&P 500 futures fell 0.7% to 2086. Changes in futures aren't
necessarily reflected in market moves after the opening bell.
The pan-European Stoxx Europe 600 index declined 1.1%. In Asia,
currencies tumbled and most stock markets fell.
The onshore yuan on Tuesday posted its biggest one-day loss in
two decades. A weaker yuan could hurt the competitiveness of firms
outside China by making their goods and services relatively more
expensive, while companies that generate sales in China could find
revenue generated in yuan is worth less in their home currency.
Treasury prices rose, pushing the 10-year yield down to 2.176%
from 2.238% on Monday. Crude-oil futures lost 2.3% to $43.92 a
barrel.
Gold futures rose 0.4% to $1108.60 an ounce.
In corporate news, Google Inc.'s sweeping reorganization
continued to capture investors' attention. The move will separate
its highly profitable search and advertising business from other
efforts, and create a holding company called Alphabet Inc. Shares
rose 5.2% in premarket trading.
Symantec Corp. said Tuesday it agreed to sell its Veritas
business to a group of investors led by private-equity firm Carlyle
Group LP for $8 billion in cash. Shares rose 2.5% premarket.
Write to Saumya Vaishampayan at saumya.vaishampayan@wsj.com and
Christopher Whittall at christopher.whittall@wsj.com
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