US: Wall St opens lower as global growth worries seep in

[NEW YORK] Wall Street opened lower as investors sought shelter in safe-haven assets amid a drop in oil prices and global growth worries.

US government bond yields were at an all-time low as weak data from China added fuel to the uncertainty stemming from Britain's vote to leave the European Union.

Oil prices fell nearly 3 per cent as a potential economic slowdown weighed on prospects of demand.

Shares of oil and gas companies including Exxon, Marathon Oil and Freeport fell.

Data from China showed that the country's services sector activity rose to an 11-month high in June, but a composite measure of activity including manufacturing fell to its lowest in four months.

"We have some profit-taking from last week's rally, but it won't be anything substantial. As long as yields crumble, they will act as a cushion for the stock market," said Peter Cardillo, chief market economist at First Standard Financial in New York.

The S&P and the Dow clocked their highest weekly gains for the year last week, recovering from a two-day selloff that robbed global markets off US$3 trillion.

The Bank of England said the outlook for UK's financial stability post-Brexit was "challenging" and said it would lower the amount of capital that banks were required to hold in reserve in order to allow them to keep lending.

At 9:45 am ET, the Dow Jones Industrial Average was down 96.77 points, or 0.54 per cent, at 17,852.6.

The S&P 500 was down 14.18 points, or 0.67 per cent, at 2,088.77.

The Nasdaq Composite was down 42.07 points, or 0.87 per cent, at 4,820.50.

Seven of the 10 major S&P indexes were lower, led by a 1.3 per cent drop in the industrials sector. General Electric, Boeing and 3M fell about 1 per cent.

Financials, which are heavily exposed to UK markets, fell for the second day as the chances of an interest rate hike in the US seemed meager.

Goldman Sachs fell 2.5 per cent and was the biggest drag on the Dow, while Bank of America was down about 2.1 per cent.

The Commerce Department will release a report on Tuesday that is expected to show that new orders for manufacturing goods fell by 1 per cent in May, compared to 1.9 per cent in April. The data is expected at 10:00 am ET.

While traders do not expect the US Federal Reserve Bank to raise interest rates this year, they will keenly watch policymakers' comments on what the Fed's next step would be.

New York Fed President William Dudley is scheduled to participate in a discussion in Binghamton, New York at 2:30 pm ET (1830 GMT).

The Fed's next policy meeting is on July 26-27.

Tesla's shares fell 4.3 per cent to $207.45 after the electric car maker missed vehicle deliveries target for the second consecutive quarter.

Delta Air Lines fell 3.9 per cent to $35.31 after saying it expected a smaller profit margin for the second quarter and lowered passenger unit revenue guidance.

Declining issues outnumbered advancing ones on the NYSE by 2,149 to 631. On the Nasdaq, 1,824 issues fell and 592 advanced.

The S&P 500 index showed 37 new 52-week highs and no new lows, while the Nasdaq recorded 34 new highs and 9 new lows.

REUTERS