LONDON (ShareCast) - (Sharecast News) - Trading on Wall Street has gotten off to a volatile start with weak German manufacturing figures sparking worries about global growth, sending traders scurrying for the relative safety of the fixed income space, although some strategists continued to see gains ahead.
Earlier, IHS Markit reported that its euro area manufacturing sector Purchasing Managers' Index plumbed a 71-month low in March amid a "marked" decline in export orders, while that for Germany falling to a 79-month low.

Nevertheless, despite the ongoing rotation from stocks to bonds, which last week saw $20.7bn of outflows, strategists at Bank of America-Merrill Lynch stood by their contrarian call, forecasting the S&P 500 would rise past the 3,000 point mark in the front half of the year.

"Extraordinary abrupt end to central bank hiking cycle + Fed paranoia of credit event is uber-bullish credit & uber-bearish volatility [...] 40 global central bank hikes in 2018, S&P 500 PE multiple -4 points; end of tightening in 2019 consistent with equity market re-rating; S&P500 multiple has risen from 14.6 to 16.6 this year (today S&P500 2843 & EPS $171)... higher multiples likely."

Against that backdrop, as 1424 GMT the Dow Jones Industrial Average was down by 0.76% to 25,763.90, alongside a drop of 0.78% on the S&P 500 to 2,832.69 while the Nasdaq Composite was falling 0.90% to 7,767.65.

The data out of the Eurozone also sent the Greenback sharply higher and squeezed the so-called yield curve even lower, to just nine basis points, as the yield on the benchmark 10-year US Treasury note fell by nine basis points to 2.45%.

As the yield curve narrowed, shares of lenders were walloped, with the KBW bank sector index down by 3.14%, alongside a 2.0% decline in an index of Media Agencies and a retreat of 1.30% for Biotechnology.

Markit's manufacturing purchasing managers' index for Germany fell to 44.7 in March from 47.6 in February, missing expectations for a reading of 48.0.

IHS Markit Principal economist, Phil Smith, said: "Uncertainty towards Brexit and US-China trade relations, a slowdown in the car industry and generally softer global demand all continue to weigh heavily [...]."

The same survey compiler also published its US factory sector PMI on Friday, which fell from a reading of 53.0 for February to 52.5 in March - a 21-month low.

In corporate news, Nike shares were off 5% after its third-quarter numbers late on Thursday.

CMC Markets analyst David Madden said: "Adjusted EPS were 68 cents, which topped the 65 cent forecast, and revenue was $9.611 billion, broadly in line with forecasts. The Converse brand saw a 2% dip in sales, and that worried some investors."

Biogen was another standout faller, after multiple brokers, including Morgan Stanley and UBS, came out with negative calls for the biotech giant.

Tiffany's was up 3% after the jeweller's fourth-quarter earnings beat analysts' expectations, but sales were a miss.

Hibbett Sports saw its shares surge 29% as its fourth-quarter earnings topped forecasts.

Elsewhere, BlackRock was likely to be in focus following reports that it is advanced talks to buy French software company eFront for between $1bn and $1.5bn in a deal that could be announced within days.

But it wasn't all bad news for the US economy on Friday, with the National Association of Realtors reporting that existing home sales jumped by 11.8% in February from the month before to reach an annualised rate of 5.51m (consensus: 5.1m), bolstered by lower mortgage rates, growing incomes and improved consumer confidence.

Related to the above, Minneapolis Fed chief, Neel Kashkari, was reportedly making 'dovish' sounding noises, saying he wasn't sure whether the slowdown is real or just a blip.

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