Investing.com – The S&P closed lower on Monday as fears over a financial crisis in Turkey intensified and energy stocks slumped on falling oil prices.
The economic turmoil in Turkey continued, stoking fears about a spill over into emerging markets, which would hurt both global growth and sentiment for riskier assets like stocks.
The TRY/USD slumped more than 8% as investors were largely unimpressed by the Turkish central bank's efforts to stabilize the lira and restore confidence in the economy.
A row between the United States and Turkey deepened last week as the Trump administration doubled steel tariffs on Turkey and vowed to pile pressure on Ankara over the fate of an American pastor, Andrew Brunson, who faces terrorism charges in Turkey.
The reverberations of a plunging lira swept through the markets, hitting financials, mostly banks, which some fear are somewhat vulnerable to a collapse in Turkey's economy, despite analysts claiming the risk of contagion is limited.
"There is little evidence yet of contagion," said Jim Strugger, a derivatives strategist at MKM Partners. "Anecdotally, it's worth pointing out that few clients seem particularly concerned about potential contagion emanating from Turkey."
Weakness in energy stocks also weighed on the broader averages as oil prices extended declines from last week to settle lower on concerns about global oil-demand growth.
On the New York Mercantile Exchange, crude futures for September delivery fell 43 cents settle at $67.20 a barrel.
Twitter Inc (NYSE:TWTR) stock closed 2.5% higher after famed short seller Citron Research reversed its earlier negative call on the social media company and slapped a $52 price target on its shares, citing privacy concerns were in the "rear view," and execution was seen on all fronts.
In other corporate news, Tesla (NASDAQ:TSLA) CEO Elon Musk said his claim last week that the necessary funding had been secured was based on repeated and ongoing conversations with the Saudi Arabian sovereign wealth fund.
"Going back almost two years, the Saudi Arabian sovereign wealth fund has approached me multiple times about taking Tesla private," Musk said in a blog post published Monday.
Elsewhere, Harley-Davidson (NYSE:HOG) stock tumbled 4% after President Trump said in a tweet Sunday, it's "great" that consumers might boycott Harley-Davidson if it moves part of its production overseas.
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