US Stocks Lower on New US-China Worries11/20 16:09
Stocks closed broadly lower on Wall Street Wednesday as investors turned
anxious about the possibility that the U.S. and China may not reach a trade
deal before next year.
(AP) -- Stocks closed broadly lower on Wall Street Wednesday as investors
turned anxious about the possibility that the U.S. and China may not reach a
trade deal before next year.
Technology stocks took the heaviest losses. Communication services and
industrial stocks also were big losers. Banks fell as bond yields declined.
Energy stocks notched the biggest gains as crude oil prices rebounded.
A published report suggested a "phase one" trade pact may not be completed
this year as negotiators continue to wrestle over differences. Beijing is
pressing Washington to agree to broader tariff rollbacks on Chinese goods.
Investors have been hoping the world's two biggest economies can make a deal
before new and more damaging tariffs take effect Dec. 15 on about $160 billion
in Chinese imports. Those duties would cover smartphones, laptops and other
"If a deal is not going to get done before the end of the year, then all of
a sudden this uncertainty comes back in around what's going to happen around
December 15," said Scott Ladner, chief investment officer at Horizon
Investments. "Are the tariffs back on the table again? The market has certainly
come to expect that those are not going to happen."
The selling nudged the major U.S. stock indexes off their recent all-time
The S&P 500 index dropped 11.72 points, or 0.4%, to 3,108.46. The Dow Jones
Industrial Average lost 112.93 points, or 0.4%, to 27,821.09. The index was
briefly down 258 points.
The Nasdaq slid 43.93, or 0.5%, to 8,526.73. The Russell 2000 index of
smaller company stocks gave up 6.68 points, or 0.4%, to 1,591.61.
Major stock indexes in Europe also closed lower.
Growing optimism among investors that the U.S. and China were making
progress toward a limited trade deal helped pave the way for gains in the
market in recent weeks, including a string of all-time highs for the major
That optimism dimmed Wednesday as investors weighed the implications of more
tariffs kicking in next month.
The two countries have raised tariffs on billions of dollars of each other's
goods in the fight over China's trade surplus and technology ambitions. That
weighs on trade worldwide and threatens to depress corporate earnings and
global economic growth, which has already showed signs of slowing.
President Donald Trump said Tuesday he was prepared to raise tariffs on
Chinese exports if the nations can't reach an agreement on trade.
The Senate may have complicated the path to a deal Wednesday, when it passed
a resolution in support of human rights in Hong Kong following months of
antigovernment protests. China condemned the move and threatened "strong
Technology and communication services companies were among the biggest
losers Wednesday. HP fell 2% and AT&T slid 2.2%.
Citigroup dropped 1.2% as financial stocks fell along with bond yields. The
yield on the 10-year Treasury slid to 1.74% from 1.78% late Tuesday. Falling
bond yields hurt banks because they are a benchmark for the interest rates
lenders charge on mortgages and other loans.
Energy companies held up better than the rest of the market as oil prices
climbed 3.4%. ConocoPhillips rose 3.8%.
Benchmark crude oil rose $1.90 to settle at $57.11 a barrel. Brent crude
oil, the international standard, gained $1.49 to close at $62.40 a barrel.
Utilities, real estate companies and makers of household goods also rose as
traders favored less-risky and higher-dividend paying stocks.
Investors also had their eye on the latest batch of quarterly results from
Target surged 14.1% after handily beating Wall Street's third-quarter
earnings estimates. The retailer also raised its profit forecast for the year.
Lowe's rose 3.9% after raising its profit forecast for the year following a
solid third quarter. The home improvement retailer has been working to improve
profit and sales to better compete with rival Home Depot, which on Tuesday cut
its profit forecast after reporting disappointing earnings. The stock dropped
Urban Outfitters plunged 15.2% after the clothing and accessories retailer
fell short of Wall Street's third-quarter profit and sales forecasts.
In other commodities trading, wholesale gasoline rose 6 cents to $1.66 per
gallon. Heating oil climbed 3 cents to $1.89 per gallon. Natural gas rose 5
cents to $2.56 per 1,000 cubic feet.
Gold was unchanged at $1,473.30 per ounce, silver was unchanged at $17.10
per ounce and copper was unchanged at $2.65 per pound.
The dollar rose to 108.64 Japanese yen from 108.53 yen on Tuesday. The euro
weakened to $1.1070 from $1.1078.