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Wall Street drops as trade jitters resurface

Wall Street drops as trade jitters resurface

By Shreyashi Sanyal

(Reuters) - Wall Street fell 1.5 percent on Friday with a drop in technology stocks sparking a turnaround from earlier in the day, as renewed concerns of the China-U.S. trade situation offset the effect of a jump in oil prices and a tepid U.S. jobs report.

The trade standoff between Washington and Beijing has been a major overhang on equities for most of this year and this week has seen the markets sell off on diminishing hopes that their truce, brokered last weekend, would help resolve differences.

These concerns were fanned on Friday by White House trade adviser Peter Navarro's comments that U.S. officials would raise tariff rates if the two countries could not come to an agreement during the 90-day negotiating period.

Earlier, a Labor Department report showed nonfarm payrolls increased by a less-than-expected 155,000 jobs last month. The data was tepid enough to lower bets for faster future interest rate hikes without fanning fears of an economic slowdown.

Stock futures pared losses after the jobs report and the three major indexes moved higher shortly after the open. But the bump was short lived.

"Some of the major fears of economic slowdown (such as) the trade conflict and rising yields are coming back, and one piece of economic data is not enough for markets to bounce," said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

The S&P technology and healthcare indexes slid more than 2 percent, while the five other sectors, including trade-sensitive industrials, were down between 1 percent and 2 percent.

Apple Inc, Microsoft Corp, Amazon.com Inc and Alphabet Inc were all down 2 percent or more and were the biggest drags on the S&P and the Nasdaq.

At 11:30 a.m. ET the Dow Jones Industrial Average was down 384.22 points, or 1.54 percent, at 24,563.45, the S&P 500 was down 37.78 points, or 1.40 percent, at 2,658.17 and the Nasdaq Composite was down 125.86 points, or 1.75 percent, at 7,062.40.

The S&P's 50-day moving average fell below its 200-day moving average in intraday trading, a phenomenon known as a "death cross" and one that stands as a bearish near-term signal only if it holds through the close.

Energy stocks rose 1.10 percent after crude oil prices jumped as big Middle East producers in OPEC agreed to reduce output to drain global inventories and support the market. [O/R]

The energy and the defensive utilities were the only two among the 11 major S&P sectors to trade higher.

Altria Group Inc rose 2.1 percent after the Marlboro cigarette maker took a $1.8 billion stake in Canadian cannabis producer Cronos Group Inc, whose U.S.-listed shares jumped 21 percent.

Declining issues outnumbered advancers for a 1.20-to-1 ratio on the NYSE and a 1.41-to-1 ratio on the Nasdaq.

The S&P index recorded seven new 52-week highs and nine new lows, while the Nasdaq recorded 11 new highs and 89 new lows.

(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.


Updated Date: Dec 08, 2018 00:06 AM

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