Home / International/ Wall Street slips as trade war stokes fears of recession

Wall Street slips as trade war stokes fears of recession


Comments / {{hitsCtrl.values.hits}} Views / Tuesday, 13 August 2019 00:00


FILW PHOTO: A trader works on the floor at the New York Stock Exchange (NYSE) in New York, US - Reuters

Reuters: US stocks slipped on Monday, dragged down by financial shares, as investors fled riskier assets on fears that a drawn-out trade war between the United States and China could force the global economy into recession. 

The three main Wall Street indexes ended marginally lower last week, wrapping up five days of high volume trading marked by wild swings, as investors feared that a slide in China’s yuan would expand the scope of the trade war to include currencies. 

President Donald Trump said on Friday he was not ready to make a deal with China, pouring cold water on any hopes that the dispute would end soon. Trump’s pledge to tax the remaining $300 billion worth of Chinese imports goes into effect on 1 Sept. 

“It appears to me that the US and China are pulling further apart on trying to reach an agreement,” said Charles Schwab in Austin’s Trading and Derivatives Vice President Randy Frederick. 

“If he (Trump) postpones that date (1 Sept.), we may get a short period of calm but as long as that issue of new tariffs is floating around out there, pending at some point, I think this volatility is going to remain.” Over the weekend, Goldman Sachs Group Inc. said fears of the US-China trade war leading to a recession were growing and that it no longer expected a trade deal before the 2020 US presidential election. 

Trade-related worries have been a major drag on the benchmark S&P 500, which has slipped 3.7% from its all-time high hit in July. 

At 9:39 a.m. ET, the Dow Jones Industrial Average was down 188.66 points, or 0.72%, at 26,098.78, the S&P 500 was down 20.19 points, or 0.69%, at 2,898.46. The Nasdaq Composite was down 63.78 points, or 0.80%, at 7,895.36. 

Investors seeking safety in perceived safe havens bolstered the Japanese yen, gold prices and US Government bond prices. 

Ten of the 11 major S&P sectors were in the red, with the S&P 500 financial index shedding 1.47% and leading the losers. The bank sub-sector tumbled 2.01%, as lower bond yields hit shares of interest-rate sensitive lenders. 

The so-called FAANG group – Facebook Inc., Amazon.com Inc., Apple, Netflix Inc. and Google-parent Alphabet Inc. – which have led the market rally this year, slipped between 0.5% and 1.5%.  Amgen Inc. rose 4.0% as a US judge upheld two patents relating to blockbuster rheumatoid arthritis drug Enbrel, denying a challenge by Novartis AG, which is seeking to launch a copycat version. 

Declining issues outnumbered advancers for a 2.80-to-1 ratio on the NYSE and for a 2.69-to-1 ratio on the NASDAQ. 

The S&P index recorded five new 52-week highs and nine new lows, while the NASDAQ recorded 13 new highs and 62 new lows. 


Share This Article

Facebook Twitter


DISCLAIMER:

1. All comments will be moderated by the Daily FT Web Editor.

2. Comments that are abusive, obscene, incendiary, defamatory or irrelevant will not be published.

3. We may remove hyperlinks within comments.

4. Kindly use a genuine email ID and provide your name.

5. Spamming the comments section under different user names may result in being blacklisted.

COMMENTS

Today's Columnists

Victory over the oppressed

Tuesday, 19 November 2019

The Presidential Election is over and the new President has taken his oaths. Although there were opinions expressed that there can be a second count of preference votes of the candidates other than the first and second, it was an easy victory for Got


The mantra of attracting high-end tourists

Tuesday, 19 November 2019

“Easier said than done!” is what many veterans of the tourism industry say whenever the subject of enticing high spenders to Sri Lanka is debated. That being so, some boutique brands have fetched high prices in the past though the current situati


Adopt high-impact interventions to secure future of antibiotics and rollback the global AMR crisis

Tuesday, 19 November 2019

Antimicrobial resistance (AMR) is a global crisis that threatens the future of our most precious drugs: antibiotics. Across the world, AMR kills an estimated 700,000 people annually, including 230,000 from multi-drug resistant tuberculosis. By 2050,


A child’s guide to MCC Compact Sri Lanka

Monday, 18 November 2019

Intelligent children, unlike some of the adults, are curious, probing and questioning. They do not jump to conclusions until and unless they are convinced of facts that have been presented to them. Asani, a student in the Advanced Level class in a le


Columnists More