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Wall Street Ends Lower on Trade Fear Revival

Wall Street Ends Lower on Trade Fear Revival
(Joe Sohm/Dreamstime)

Friday, 02 August 2019 04:05 PM

Wall Street extended its sell-off on Friday amid renewed trade fears, capping a week where the benchmark S&P 500 index and the Nasdaq saw their worst weekly percentage plunges since December, when investors were spooked by the prospect of a looming recession.

The Dow Jones Industrial Average fell 98.41 points, or 0.37%, to 26,485.01, the S&P 500 lost 21.52 points, or 0.73%, to 2,932.04 and the Nasdaq Composite dropped 107.05 points, or 1.32%, to 8,004.07.

The sell-off wrapped up a tumultuous week, which saw the U.S. Federal Reserve cut interest rates for the first time since 2008 and a renewal of trade war fears following a tweet by U.S. President Donald Trump announcing plans to impose additional tariffs on $300 billion of Chinese imports on Sept 1.

A report from Labor Department on Friday showed that nonfarm payrolls increased by 164,000 jobs last month, in line with expectations.

“The 164,000 gain in non-farm payrolls in July illustrates that, for all the concern over weak global growth and trade policy, the domestic economy is still holding up reasonably well,” said Andrew Hunter, senior U.S. economist at Capital Economics in London.

“President Donald Trump’s move to re-escalate tensions with China has clearly increased the pressure on the Fed to deliver further policy loosening,” Hunter added. “But the relative resilience of employment growth suggests that trade tensions alone won’t necessarily be enough to convince officials to cut rates again.”

The CBOE Volatility index, a gauge of investor anxiety, was on a path to close at its highest level in two months.

The Dow was down more than 300 points earlier.

Of the 11 major sectors in the S&P 500, eight were trading lower.

Technology companies , which get a sizeable portion of their revenue from China, were the hardest hit, down 1.75%. This sector was weighed by iPhone maker Apple Inc  and chipmakers.

The tech-heavy Nasdaq was set for its biggest one day percentage drop in two and a half months.

The Philadelphia Semiconductor index  slipped 1.7%, while shares of Apple fell 2.2%.

Second quarter earnings season has passed its halfway mark, with 380 of the companies in the S&P 500 having reported. Of those, 73.9% have beaten analyst expectations.

New tariff threats dragged oil prices lower for the week, as Exxon Mobil and Chevron reported quarterly results.

Exxon topped analyst expectations but fell year-on-year, while Chevron’s earnings rose 26% in line with forecasts. Exxon Mobil’s and Chevron’s shares were down 1.5%, and 0.1%, respectively.

Sprint Corp shares dropped 6.2% even after reporting fewer-than-expected phone subscriber losses in the quarter.

Restaurant Brands International jumped 6.3%, after quarterly profits topped expectations.

Declining issues outnumbered advancing ones on the NYSE by a 2.01-to-1 ratio; on Nasdaq, a 2.45-to-1 ratio favored decliners.

The S&P 500 posted 9 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 16 new highs and 172 new lows.

© 2019 Thomson/Reuters. All rights reserved.

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Wall Street’s main indexes sank to one-month lows on Friday after a sharp escalation in U.S.-China trade tensions and tepid job growth in July reinforced fears of a global economic slowdown.
stock, market, dow, wall street, s&p 500
Friday, 02 August 2019 04:05 PM
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