NEW YORK, May 9 — US stocks tumbled today, with focus on a high-stakes meeting between the United States and China that could decide the fate of a long-awaited trade deal, even as additional tariffs on Chinese goods loomed.
Trump vowed not to back down on imposing new tariffs unless Beijing “stops cheating our workers”, as two-day talks begin in Washington today.
China has threatened to retaliate if tariffs on US$200 billion (RM831 billion) worth of Chinese goods increase to 25 per cent tomorrow, rekindling worries of a global economic slowdown and triggering flight to safety among investors.
“It is a concerning feeling for investors because they don’t know what to make of these conflicting signals from trade talks,” said Rick Meckler, partner at Cherry Lane Investments in New Vernon, New Jersey.
“There isn’t really a lot of precedent for what Trump is doing here but the general view is that he does want an agreement. The talks aren’t dead and there is potential that they might still reach an agreement.”
The benchmark S&P 500 index fell below its 50-day moving average, a closely watched level of near-term momentum, with all the major sectors lower.
The technology sector posted the steepest declines, slipping 1.58 per cent, dragged down by a fall in shares of iPhone maker Apple Inc and chipmakers, which get a large portion of their revenue from China.
The Philadelphia chip index declined 2.25 per cent, also pressured by a modest profit growth forecast from Intel. The index has fallen 7.6 per cent so far this week, and is on pace to post its biggest percentage weekly loss since January 2016.
Trade-sensitive industrial bellwethers were also hit, with Boeing Co, Caterpillar Inc and 3M Co trading down 1 per cent.
Meanwhile, data showed US goods trade deficit with China, a focus of the Trump administration’s “America First” agenda, dropped to a five-year low in March amid a surge in exports, including soybeans.
The CBOE Volatility Index, a gauge of investor anxiety, spiked to its highest level in four months.
At 9.43am ET, the Dow Jones Industrial Average was down 245.57 points, or 0.95 per cent, at 25,721.76. The S&P 500 was down 27.83 points, or 0.97 per cent, at 2,851.59 and the Nasdaq Composite was down 93.95 points, or 1.18 per cent, at 7,849.37.
In a bright spot, Tapestry Inc jumped 11.3 per cent, the most among S&P companies, after the Coach handbag maker beat quarterly profit estimates and announced a US$1 billion share buyback program.
Chevron Corp climbed 2.9 per cent, and was the biggest boost to the Dow, after the oil major said it would not raise its US$33 billion offer to buy Anadarko Petroleum Corp.
Declining issues outnumbered advancers for a 3.83-to-1 ratio on the NYSE and for a 3.45-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week high and eight new lows, while the Nasdaq recorded 13 new highs and 43 new lows. — Reuters
Source: The Malay Mail Online