Global Markets: U.S. stock market falls on plunging retail sales, China-U.S. tensions; oil up
By Jessica DiNapoli NEW YORK (Reuters) - U.S. stocks sank on Friday after data showed a surprisingly sharp dive in retail sales and as investors worried about increased Sino-U.S. trade hostilities, while signs of a pick-up in crude demand boosted oil prices
By Jessica DiNapoli
NEW YORK (Reuters) - U.S. stocks sank on Friday after data showed a surprisingly sharp dive in retail sales and as investors worried about increased Sino-U.S. trade hostilities, while signs of a pick-up in crude demand boosted oil prices.
The U.S. Commerce Department said retail sales, a significant portion of the economy, plunged 16.4% last month, the biggest decline since the government started tracking the figures in 1992. That data followed a historic 20.5 million job losses last month.
“From bad to worse to worst, the U.S. economy is in the midst of an outright economic free-fall," said market analyst Christopher Vecchio at Dailyfx.com. "Despite what the U.S. Treasury yield curve has been signaling – less than a 20% chance of a recession within the next 12-months – it’s obvious that fears of a major economic contraction are well-founded."
Still, oil prices rose to their highest levels in more than a month on signs that demand from China is picking up and data showing China's industrial output in April expanded for the first time this year.
Economic fears were heightened by news that the Trump administration ramped up tensions with China by moving to block shipments of semiconductors to Huawei Technologies. China responded, saying it would put U.S. companies on an "unreliable entity list."
The Dow Jones Industrial Average fell 79.65 points, or 0.34%, to 23,545.69, the S&P 500 lost 9.12 points, or 0.32%, to 2,843.38 and the Nasdaq Composite dropped 20.18 points, or 0.23%, to 8,923.55.
A broad measure of European stocks was set to end the bruising week roughly 4% lower, the biggest weekly fall since the mid-March rout as the coronavirus crisis spread worldwide.
MSCI's world stock index, a touch softer on Friday, was down around 2.8% this week and also set for its biggest weekly drop since March.
Analysts called the weekly decline a natural correction after a rally since mid-March, which also reflected growing concerns about rising U.S.-China tensions.
On Thursday, U.S. President Donald Trump signaled a further deterioration in his relationship with China over the novel coronavirus, saying he had no interest in speaking to President Xi Jinping and suggesting he could even cut ties with Beijing.
"There is no doubt that the optics around the trade/diplomacy backdrop have worsened in the last week and this has had a negative influence," Chris Bailey, European strategist at Raymond James in London, said.
U.S. Federal Reserve Chair Jerome Powell has brushed off the notion that the Fed could push negative rates after futures tied to Fed interest rate policy expectations began pricing a small chance of sub-zero U.S. rates within the next year.
Benchmark 10-year notes last fell 9/32 in price to yield 0.646%, from 0.619% late on Thursday.
The dollar index rose 0.11%, with the euro up 0.1% to $1.0815.
(Reporting by Jessica DiNapoli; Editing by Nick Zieminski and David Gregorio)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.