U.S. stocks open lower; British pound falls further

U.S. stocks fell sharply in early trading Monday following another slide in European markets as investors grappled with the fallout of Britain’s vote to leave the European Union.

The British pound, which last week plunged to its lowest level since 1985, continued to fall as traders expected the British economy would take a hit.

The Dow Jones industrial average was down 234 points, or 1.4%, to 17,165 as of 10:05 a.m. EDT. The Standard & Poor’s 500 index slid 29 points, or 1.5%, to 2,007. The Nasdaq composite fell 76 points, or 1.6%, to 4,631.

The latest decline followed the market’s plunge on Friday, when the Dow and S&P 500 clocked their biggest losses since August and the Nasdaq notched its worst day since August 2011. Despite the losses, the market is still well above the lows it reached in February, when the S&P 500 closed as low as 1,829.

Banks and other financial companies led the broad slide on Wall Street. Charles Schwab was the biggest decliner in the S&P 500, tumbling $1.95, or 7.5%, to $24.19. Materials and technology stocks also fell sharply. Energy companies declined as the price of U.S. crude oil headed lower.

European stock markets added to their painful losses from Friday, when concern over the vote outcome wiped out $2.1 trillion of stock value from Hong Kong to London to New York.

Britain’s FTSE 100 was down 2%, Germany’s DAX was down 1.8% and France’s CAC 40 was down 2.1%.

Traders were watching for more aftershocks as EU leaders press London to start the complex process of leaving the 28-nation trading bloc. Prime Minister David Cameron wants to wait several months.

“Markets will be nervous given that the EU and U.K. have some mismatch in terms of timing of exit procedures and negotiations,” Mizuho Bank analysts said in a report.

“The EU’s legitimacy may be tested by separatist parties,” the report said. “Spanish elections more immediately and then French elections in 2017 add to the complexity of political dynamics involved in negotiations. Brewing uncertainty suggests that the stage is set for potentially stormy global markets.”

In the first direct reflection of business sentiment in Britain, a leading business group said Monday that 20% of its members plan to move some of their operations out of the U.K. in light of the country’s decision to leave the EU. The Institute of Directors said a survey of its 1,000 members showed that 3 in 4 believe that Britain’s exit from the EU, known as Brexit, will be bad for business.

Earlier, some Asian markets had bounced back somewhat following reports that Japanese Prime Minister Shintaro Abe instructed financial officials to take steps to stabilize financial and currency markets. Tokyo’s Nikkei 225 rose 2.4%, making up some of the ground it lost Friday, when it fell nearly 8%.

The Shanghai Composite index climbed 1.2%, while Hong Kong’s Hang Seng shed 0.2%. Seoul’s Kospi rose 0.1%.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.48%, from 1.56% late Friday.

In currency markets, the euro weakened to $1.1006, from $1.1121 in Friday’s trading, while the yen fell to 101.64, from 102.24. The British pound slid to $1.3218, from $1.3638, despite the British treasury’s reassurances that the economy was strong enough to withstand the uncertainty.

In energy futures trading, benchmark U.S. crude was down $1.02, or 2.1%, at $46.62 a barrel in New York. Brent crude, used to price international oils, was down 81 cents, or 1.7%, at $47.60 in London.

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UPDATES:

7:46 a.m.: This article has been updated with more recent prices and additional information.

This article was originally published at 6:58 a.m.