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Overnight Markets: Wall Street slides on worries about Saudi Arabia, Italy

Overnight Markets: Wall Street slides on worries about Saudi Arabia, Italy

Stocks fell sharply on Thursday as the European Commission issued a warning regarding Italy's budget and on rising worries over US-Saudi relations after the suspected murder of journalist Jamal Khashoggi.

The Dow Jones Industrial Average declined 327 points, or 1.3%, to 25,379, the S&P 500 lost 40 points, or 1.4%, to 2,769 and the Nasdaq Composite dropped 158 points, or 2.1%, to 7,485.

Indexes had opened lower as Chinese stocks fell overnight, sparking fresh worries about the impact of trade tensions on China's economy.

However, stocks pared early losses in morning session but reversed course to fall further as European markets closed. Italian bond yields surged after the European Commission deemed the country's 2019 budget draft to be in breach of EU rules.

Markets came under further pressure after US Treasury Secretary Steven Mnuchin pulled out of an investor conference in Saudi Arabia as the White House awaited the outcome of investigations into the disappearance of Khashoggi.

S&P 500 technology and consumer discretionary stocks plunged more than 2%. Among the S&P's major sectors, only utilities and real estate, considered defensive, avoided losses.

Large technology companies were especially weak, with Apple falling 2.3%, Amazon 3.3%, Netflix 4.9% and Tesla Motors 2.9%.

Textron shares fell 11.3% after the Cessna business jet maker reported weak earnings, while equipment rental company United Rentals Inc sank 15.0% after unveiling poor results.

 Sealed Air Corp shares plunged 8.3% after the packaging company cut its full-year profit outlook due to higher raw material and freight costs.

Among the few bright spots was Philip Morris International Inc, whose shares rose 3.5% after the Marlboro cigarette maker topped analysts' estimates for quarterly profit and sales.

In Asia, shares fell on Friday in morning trade after China's GDP growth for the third quarter of 2018 came in below expectations.

The Greater China markets continued to slide in the morning, with Hong Kong's Hang Seng index falling by 0.96%. Over on the mainland, the Shanghai composite declined 0.7%.

In Japan, the Nikkei 225 fell by around 1% in morning trade, while the Topix declined by 1.05%. Over in South Korea, the Kospi traded lower by 0.44%. Australia’s ASX 200 saw a partial recovery but remained lower by 0.31% in morning trade.

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