By Rodrigo Campos
NEW YORK (Reuters) – Major stock markets slipped on Monday as rising tensions between Western powers and Saudi Arabia added to concerns over economic growth, with investors flocking to traditional safe havens like the Japanese and Swiss currencies, as well as gold.
Oil prices were little changed as the Saudi-West rift more than offset concerns over slowing demand for oil in the long term.
Saudi Arabia’s King Salman on Monday ordered an internal probe of the unexplained disappearance of Jamal Khashoggi as a joint Turkish-Saudi team was expected at the Saudi consulate in Istanbul, where the journalist and dissident was last seen on Oct. 2.
Turkish police have audio showing Khashoggi was killed at the consulate, sources told Reuters.
Over the weekend, prominent business people, including JPMorgan CEO Jamie Dimon and Ford Chairman Bill Ford canceled plans to attend an investor conference later this month in Saudi Arabia, the world’s largest oil exporter.
“People had thought the Saudis would make up for the fall in Iran’s output. If they are starting to use oil as their weapon, that will be a whole new chapter,” said Kazuhiko Fuji, senior fellow at Research Institute of Economy, Trade and Industry, a think-tank affiliated with the Japanese government.
On Wall Street, major indexes were mixed after soft U.S. retail sales data. Apple
The Dow Jones Industrial Average <.DJI> fell 59.82 points, or 0.24 percent, to 25,280.17, the S&P 500 <.SPX> gained 0.97 points, or 0.04 percent, to 2,768.1 and the Nasdaq Composite <.IXIC> dropped 25.43 points, or 0.34 percent, to 7,471.47.
The pan-European FTSEurofirst 300 index <.FTEU3> rose 0.27 percent and MSCI’s gauge of stocks across the globe <.MIWD00000PUS> gained 1.10 percent.
Emerging market stocks rose 2.66 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan <.MIAPJ0000PUS> closed 2.35 percent higher.
Japan’s Nikkei <.N225> slumped 1.8 percent after Washington said it would seek a provision about currency manipulation in future trade deals with Japan.
The dollar softened against major currencies after the weak U.S. retail sales data for September while Treasury yields were little changed after last week hitting their highest level in over seven years.
The Japanese yen strengthened 0.37 percent versus the greenback at 111.81 per dollar, while Sterling
The Swiss franc rose 0.4300 percent versus the greenback at 0.99 per dollar.
Saudi Arabia’s riyal currency
Benchmark 10-year Treasury notes
Last week, the 10-year yield reached 3.261 percent, which was last seen in May 2011, while the 30-year yield
“This (Treasury) market sell-off is far from over. The economy is still very strong,” said Bryce Doty, senior portfolio manager at Sit Fixed Income Advisors LLC in Minneapolis.
(Reporting by Rodrigo Campos, Karen Brettell and Richard Leong in NEW YORK; additional reporting by Hideyuki Sano in TOKYO and Marc Jones in LONDON; ; Editing by Dan Grebler)