NEW YORK (AP) — U.S. stocks are skidding Friday morning after a sharp drop in Europe as investors worried about the financial stability of Turkey. The Turkish lira nosedived again following concerns about the country's economic policies and sanctions from the U.S. Banks are falling along with interest rates.
KEEPING SCORE: The S&P 500 index slid 16 points, or 0.6 percent, to 2,836 as of 10:15 a.m. Eastern time. The Dow Jones Industrial Average dropped 201 points, or 0.8 percent, to 25,307. The Nasdaq composite, which has risen for eight days in a row, sank 38 points, or 0.5 percent, to 7,853. The Russell 2000 index of smaller-company stocks fell 4 points, or 0.2 percent, to 1,686.
Investors sold stocks and bought bonds, which pushed interest rates lower. Lower rates make lending less profitable for banks.
TURKEY: The Turkish lira dropped again and is now down 66 percent this year against the dollar. The weakening lira has been pushing up the cost of goods for Turkish people and shaken international investors' confidence in the country.
U.S. President Donald Trump said Friday he is increasing a tariff on steel and aluminum imported from Turkey as a diplomatic dispute between the two countries continues.
Investors are worried about Turkish President Recep Tayyip Erdogan's unorthodox economic views. He says higher interest rates lead to higher inflation, the opposite of what standard economic theory says. As a result he's pushed Turkey's central bank to keep interest rates low, threatening its independence.
FALLOUT: Some European banks could be exposed to losses in Turkey, but analysts say the country's problems shouldn't have a big global impact. Germany's Deutsche Bank dropped 6.1 percent to $11.54 and Banco Santander of Spain fell 4.1 percent to $5.15. British bank Barclays fell 3.2 percent to $9.65.
US BANKS: Bond prices rose. The yield on the 10-year Treasury note fell to 2.89 percent from 2.93 percent. That helped send bank stocks lower. JPMorgan Chase slid 1.7 percent to $114.90 and Bank of America gave up 2 percent to $30.98. Citigroup retreated 2.8 percent to $69.94.
Big dividend stocks like utilities held up better than the rest of the market. NextEra Energy climbed 1.1 percent to $172.65 and Duke Energy rose 1 percent to $81.61.
OVERSEAS: Germany's DAX fell 1.8 percent and the CAC 40 in France fell 1.5 percent. Britain's FTSE 100 lost 0.7 percent. However the Nikkei 225 index lost 1.3 percent. Hong Kong's Hang Seng gave up 0.8 percent. In South Korea, the Kospi lost 0.9 percent.
CURRENCIES: Emerging market currencies fell and the dollar jumped. The ICE U.S. Dollar Index rose 0.8 percent, a large move. The euro fell to $1.1444 from $1.1542. The dollar rose to 110.90 yen from 111.04 yen, a smaller move, after a strong economic growth report form Japan.
LOSING GROUND: When the dollar gets stronger, it hurts U.S. companies that get a lot of revenue from overseas. That includes technology and industrial companies.
Microchip Technology tumbled 12.3 percent to $86.05 after its forecast weaker-than-expected sales in the current quarter. Chipmaker Texas Instruments lost 2.9 percent to $111.01 and Facebook fell 1.5 percent to $180.40.
Among industrials, Boeing lost 2 percent to $336.75 and 3M fell 1.5 percent to $201.68.
PRICES: The Labor Department said consumer prices climbed 2.9 percent in July compared with a year ago. The main cause was an increase in housing prices. That matched June's pace, which was the highest in six years.
ENERGY: Benchmark U.S. crude oil rose 1.2 percent to $67.59 a barrel in New York and Brent crude, the standard for international oil prices, rose 0.7 percent to $72.54 a barrel in London.