No Christmas Cheer for Stock Markets After Mnuchin Call

Stock markets around the world remained under pressure with investor confidence weighed down by the recent big sell-off that’s put key U.S. indexes on course to record their worst December since the 1930s and more in Monday’s Stock Market Update. News that U.S. Treasury Secretary called the CEOs of six major banks Sunday in an apparent attempt to reassure jittery financial markets only accentuated concerns in the markets.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 index slid 65.52 points, or 2.7 percent, to 2,351.10. The Dow sank 653.17 points, or 2.9 percent, to 21,792.20. The Nasdaq skidded 140.08 points, or 2.2 percent, to 6,192.92. The Russell 2000 index of smaller-company stocks gave up 25.16 points, or 2 percent, to 1,266.92.

For the year: The S&P 500 is down 322.51 points, or 12.1 percent. The Dow is down 2,927.02 points, or 11.8 percent. The Nasdaq is down 710.47 points, or 10.3 percent. The Russell 2000 is down 268.59 points, or 17.5 percent.

GLOBAL ROUT: The sell-off in stock markets around the world has gathered pace during December and seen many leading indexes post declines of around 10-20 percent this year. Worries about the U.S. economy and the associated increases in U.S. interest rates have lain at the heart of the declines. The S&P 500 has, for example, fallen 17.5 percent from its high in September.

MNUCHIN: Coming off another turbulent week in financial markets, Mnuchin disclosed calls with the heads of Bank of America, Citi, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo. Mnuchin said the CEOs all assured him they have ample money to finance all their normal operations, even though there haven’t been any serious liquidity concerns rattling the market. His revelation only added to the underlying worries that have gripped markets of late.

ANALYST TAKE: “Reports of Steve Mnuchin meeting with decision-makers will not provide much Christmas cheer,” said Chris Beauchamp, chief market analyst at IG. “Mnuchin is most likely worried about his job, but everyone else will draw the conclusion that there is perhaps much more to worry about.”

ASIA’S DAY: South Korea’s Kospi dropped 0.3 percent to 2,055.01 while the Shanghai Composite index was 0.4 percent higher at 25,651.38. Hong Kong’s Hang Seng lost 0.4 percent to 25,651.38 on a short trading day. Australia’s S&P ASX 200 added 0.5 percent to 5,493.80. Markets in Japan and Indonesia, which is reeling from a weekend tsunami that has killed at least 373 people, were closed.

ENERGY: It’s not just stocks that have taken a battering recently. Oil prices have sunk on concerns about the state of the global economy and also oversupply in the market. Benchmark U.S. crude shed 77 cents to $44.82 a barrel in electronic trading on the New York Mercantile Exchange while Brent crude, used to price international oils, declined 50 cents to $53.32 a barrel.

CURRENCIES: The euro was up 0.3 percent at $1.1405 while the dollar dropped 0.3 percent to 110.90 yen.