Stocks fall on Brussels attack as gold, bonds advance

Stocks fell, as deadly terrorist attacks in Brussels fueled demand for haven assets such as Treasuries, gold and the yen.

Transportation companies led losses in U.S. and European shares after explosions rocked a Brussels airport departure hall and a downtown subway station. Treasuries pared this month’s drop, while the yield on 10-year German bunds touched the lowest in almost two weeks. The pound dropped against all its major peers amid speculation the blasts may boost the case for Britain leaving the European Union. Gold gained for the first time in four days.

Two bombs went off in rapid succession at the Belgian airport and an explosion an hour later hit a subway station a short walk from EU headquarters. The incidents, which follow terror attacks in Paris in November and a suicide bombing in Istanbul on March 19, may add to security concerns in Europe as officials attempt to bring an influx of migrants under control. Terrorist incidents including the one in the French capital and London bombings in 2005 spurred equity selloffs that were erased in the following days and weeks.

“The tragic events in Brussels should weigh on market risk sentiment in the near term,” said Valentin Marinov, head of Group-of-10 foreign-exchange strategy at Credit Agricole SA’s corporate and investment-banking unit in London. “Risk-correlated and commodity currencies should remain under pressure, while safe havens like the yen and gold,” are supported, he said.

STOCKS

The Standard & Poor’s 500 Index declined 0.4% at 9:38 a.m. in New York, as the gauge fell from its highest level of the year. Delta Air Lines Inc. and American Airlines Group Inc. were among the worst performers in the benchmark gauge today, losing more than 2.6%.

The Stoxx Europe 600 Index slumped 1%, as Belgium’s Bel20 Index dropped 0.5%. On Nov. 16, the first day equities traded after the Paris terror attacks, France’s CAC 40 Index ended little changed.

Air France-KLM Group and hotel operator Accor SA slid. Thomas Cook Group Plc dropped 3.6% after also saying 2016 summer bookings have been lower than last year.

BONDS

The euro-area’s benchmark German bunds rose, while Belgian bonds were little changed. Germany’s 10-year yield fell as much as five basis points to 0.18%, while the Belgian 10-year yield was at 0.61%.

The rate on similar-maturity U.S. Treasuries declined one basis point to 1.89%.

Belgium is on high alert after the capture of Paris terror attacks suspect Salah Abdeslam, believed to be the only surviving participant of the November massacre that left 130 people dead. Abdeslam faces a Brussels court decision on Wednesday on whether to extend a Belgian arrest warrant issued on Saturday.

COMMODITIES

West Texas Intermediate dropped 1.3% to $40.99 a barrel in New York, amid speculation that some major oil producers, including OPEC members, are not planning to join an output freeze aimed at stabilizing prices.

Futures fluctuated earlier in the day following the explosions in Brussels. Libya will skip an oil producers’ meeting to discuss an output freeze in Doha on April 17, according to a person familiar with the matter. About 15 or 16 nations will attend the discussions in Qatar’s capital, said Abdalla El-Badri, secretary-general of the Organization of Petroleum Exporting Countries.

Gold in the spot market rose as much as 1.4% and traded up 0.7% at $1,252.14 an ounce.

Nickel led industrial metals lower, dropping 0.9% to $8,690 a metric ton, while zinc slid 0.7% and copper lost 0.4%.