The Standard and Poor’s 500 Index rebounded after earlier coming within two points of 1,900. The measure rose as high as 0.7 percent Monday, while losses reached as much as 1.1 percent. The Russell 2000, which tracks smaller U.S. companies, dropped 0.2 percent, after the gauge sank to a level that was in bear market territory. The Shanghai Composite Index tumbled more than 5 percent, South Africa’s rand fell to a record low, oil traded at a 12-year low and copper declined.
Equities in Europe and the U.S. sought to end week-long selloffs as a strengthening of the yuan provided some relief to concern that the weakness in the Chinese currency would spark turmoil in the economies of its major trading partners. Markets still stumbled as selling in resources worsened, with the Bloomberg Commodity Index down 2.1 percent. Investors await an indication of whether slowing global growth hurt profits last quarter as Alcoa Inc. begins the reporting season after U.S. markets close.
“January has certainly been worse than expected so far,” said Stephen Carl, principal and head equity trader at Williams Capital Group LP. “You have weak oil and the China overhang, plus some skepticism around how strong economic numbers will continue to be. We’re trying to find a trading pattern with no notable economic numbers this morning.”
The S&P 500 gained 0.3 percent at 3:40 p.m. in New York, as consumer staples and discretionary stocks, as well as technology companies, led gains. The index capped its steepest ever slide over five days to begin a year amid a worldwide rout sparked by worries that China’s slowdown is worse than anticipated. Even data showing resilience in the U.S. labor market couldn’t halt losses for the benchmark on Friday.
Freeport-McMoRan Inc. sank 20 percent to the lowest level in 15 years, while energy producers plunged 1.9percent as a group. Health-care shares also retreated, with biotechnology firms leading losses.
Alcoa Inc. unofficially kicks off the reporting season after markets close today. JPMorgan Chase & Co., Intel Corp. and Citigroup Inc. are among 11 companies scheduled to post quarterly results this week. Analysts estimate profits for S&P 500 members fell 6.7 percent last quarter.
“Hopefully this week we will get a bit more stability and proper direction in the market,” said Patrick Spencer, equities vice chairman at Robert W. Baird & Co. in London. “A decent earnings season could easily spark a revival in the market, but any disappointment or warnings about the future will be punished.”
After a day of fluctuations, European stocks closed at their lowest levels since September. The Stoxx Europe 600 Index erased its gain in the final hour of trading, falling 0.3 percent as commodity producers reversed advances.
Treasuries 10-year note yields rose from the lowest level in more than two months, climbing six basis points to 2.17 percent.
The yield dropped 19 basis points during the previous seven days and reached 2.11 percent earlier, the lowest since Oct. 29.
“There is no reason” 10-year yields can’t drop below 2 percent later this month, Jabaz Mathai, strategist at Citigroup Inc., wrote in a report dated Jan. 8. Investors have built-up overweight positions in corporate debt and any forced sell-off amid lower liquidity could weaken the sector and spur demand for Treasuries.
“With fundamentals changing slowly and risk appetite falling rapidly, the stage is set for a longer period of risk asset underperformance,” Mathai said. “There is no quick fix to the headwinds facing global growth.”
The yen fell after climbing every day last week, when an eight-day run of reductions to the yuan’s reference rate through Thursday sent shock waves through financial markets. The euro also declined Monday after China’s central bank kept the currency’s daily fixing stable for the second day in a row.
“There was a lot of people rushing around putting new positions on last week, so maybe the initial reaction has been done,” said Jane Foley, a foreign-exchange strategist at Rabobank International in London. “The yen is still very firm compared to where it was and euro-dollar will find it hard to push much lower when there is still this risk aversion. We’ve got another volatile year ahead.”
The yen touched 116.70 earlier, the strongest since Aug. 24, before reversing its gains. The euro fell 0.6 percent to $1.09.
South Africa’s rand plunged as much as 9 percent, the most since October 2008. South Korea’s won fell 1 percent to the weakest since 2010. Russia’s ruble slid 1.9 percent.
Emerging-market stocks retreated to the lowest in more than six years, with all 10 industries in the MSCI Emerging Markets Index retreating. The gauge has fallen 8.9 percent in January, extending last year’s 17 percent slump that was the worst since 2011, on concern China’s slowdown will hurt demand for goods by countries from South Korea to South Africa and Brazil that count the world’s second-biggest economy among their major trading destinations.
China’s yuan snapped a three-day loss after the central bank kept its reference rate little changed, bolstering speculation that last week’s bout of weaker fixings has halted for now. The onshore currency gained 0.3 percent and the yuan traded in Hong Kong advanced 1.1 percent.
Oil futures in New York slid 5.7 percent to $31.29 a barrel, after earlier dropping as low as $30.88. Contracts on Brent crude tumbled 6.5 percent to $31.37 in London. A rapid appreciation of the U.S. dollar may send Brent oil to as low as $20 a barrel, Morgan Stanley said.
Muted Chinese inflation data sent copper to a six-year low. BHP Billiton Ltd., the world’s largest miner, reached the lowest in a decade.
Gold retreated after posting the best week since August. The metal dropped 0.8 percent to $1,095.20 an ounce.