US STOCKS-Wall Street tumbles as concerns over trade talks mount


Reuters | Washington DC | Updated: 08-10-2019 19:53 IST | Created: 08-10-2019 19:48 IST
US STOCKS-Wall Street tumbles as concerns over trade talks mount
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U.S. stocks fell more than 1% on Tuesday as sentiment soured ahead of high-level trade talks after a report the Trump administration was moving ahead with efforts to limit capital flows into China and the inclusion of more Chinese firms in a blacklist.

The declines were broad-based, with all the major S&P 500 sectors trading lower and 28 of the 30 components of the blue-chip Dow Jones index in negative territory. Adding to the pessimism was a South China Morning Post report that said China had toned down expectations ahead of the talks set to begin on Thursday and that the Chinese delegation could depart Washington a day earlier than planned.

"I don't think there's really much hope that we are going to see a completed deal any time soon," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida. "For markets, it may be enough to just see a stop in the escalation." The U.S. widened its trade blacklist to include Chinese video surveillance firm Hikvision and surveillance equipment maker Zhejiang Dahua Technology among others, drawing a sharp rebuke from Beijing.

This pressured U.S. suppliers, with Intel Corp and Nvidia Corp falling about 1%. Ambarella Inc slumped 12%. The Philadelphia Semiconductor index declined 2.3%, while technology stocks dropped 1.2%.

Weighing on the Dow Jones Industrial Average was a 1.5% fall in shares of Boeing Co. The Wall Street Journal reported friction between the United States and Europe could further delay efforts to resume flights of the planemaker's best-selling 737 MAX jets, which have been grounded since early 2019.

Investors fled to the perceived safety of gold and government debt. Gold prices rose nearly 1%, while yield on the benchmark 10-year Treasury dropped. At 9:50 a.m. ET, the Dow Jones Industrial Average was down 264.98 points, or 1.00%, at 26,213.04, while the S&P 500 was down 33.40 points, or 1.14%, at 2,905.39. The Nasdaq Composite was down 90.11 points, or 1.13%, at 7,866.19.

Market participants will now focus on third-quarter earnings season beginning next week and analysts expect the worst quarterly profit performance since 2016, with earnings from S&P 500 companies declining nearly 3% from a year earlier, based on IBES data from Refinitiv. Domino's Pizza dropped 3.5% after the pizza chain missed Wall Street estimates for quarterly same-store sales and profit.

U.S.-listed Chinese stocks also declined, with Alibaba Group Holding, JD.com Inc and Baidu Inc falling between 2.7% and 3%. Declining issues outnumbered advancers for a 4.14-to-1 ratio on the NYSE and for a 4.08-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week highs and 10 new lows, while the Nasdaq recorded five new highs and 60 new lows.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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