S&P 500, Dow slip on trade worries, but end off of lows

Traders work on the floor of the New York Stock Exchange October 3, 2018. — Reuters pic
Traders work on the floor of the New York Stock Exchange October 3, 2018. — Reuters pic

NEW YORK, Dec 7 — The S&P 500 and Dow industrials ended slightly negative but well above their session lows in volatile trading yesterday as the arrest of a technology executive fanned fears of US- tensions over trade, while some beaten-up big technology and internet shares posted gains.

Following a rare midweek US trading holiday, stocks tumbled at the outset of the trading, with the benchmark S&P 500 dropping as much as 2.9 percent. But from midday stocks began paring their losses and the tech-heavy Nasdaq ended in positive territory.

“The market had gotten way oversold,” said Gary Bradshaw, senior vice president and portfolio manager at Hodges Capital Management in Dallas. “Investors looked up and saw they could buy good companies at much cheaper valuations than they could a couple of months ago.”

The initial selling followed news that the chief financial officer of telecom equipment maker Huawei Technologies had been arrested in Canada and faced extradition to the United States.

The arrest came as investor enthusiasm had already faded following a truce reached over the weekend in talks between the United States and China, which had prompted some hope about resolving differences over trade that have clouded the ’s outlook this year.

“You have got the news overnight of the arrest of the CFO of Huawei that I think is throwing a real monkey wrench into the positive optimism that surrounded the weekend meeting,” said Katie Nixon, chief investment officer for the wealth management division of Northern Trust in Chicago.

Stocks seemed to gain further support from a report in the Journal that Federal Reserve officials are considering whether to signal a new wait-and-see mentality after a likely interest-rate increase at their meeting in December.

The Dow Jones Industrial Average fell 79.4 points, or 0.32 per cent, to 24,947.67, the S&P 500 lost 4.11 points, or 0.15 per cent, to 2,695.95 and the Nasdaq Composite added 29.83 points, or 0.42 per cent, to 7,188.26.

Aside from trade, concerns over yields and interest rates have pressured the stock market in recent days.

US Treasury yields fell yesterday, with 10-year yields hitting three-month lows, as traders scaled back expectations on the number of the Fed would implement amid weakening economic data and market volatility.

Financial shares, which are sensitive to bond yield swings, fell 1.4 per cent.

The energy sector slumped 1.8 per cent and was the worst performing group, as oil fell after Opec and allied exporting countries ended a meeting without announcing a decision to cut crude output.

Losses for the S&P 500 were mitigated by gains for Amazon , Netflix and some of the other technology and internet stocks that have been hit particularly hard during the market’s pullback in recent months.

The major indexes fell more than 3 per cent each on Tuesday. Markets were closed on Wednesday for a day of mourning for former President George HW Bush, who died on Friday.

About 10.5 billion shares changed hands in US exchanges, well above the 7.9 billion daily average over the last 20 sessions.

Declining issues outnumbered advancing ones on the NYSE by a 1.75-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favoured decliners.

The S&P 500 posted 14 new 52-week highs and 70 new lows; the Nasdaq Composite recorded nine new highs and 376 new lows. — Reuters

Source: The Malay Mail Online

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