US stocks end lower on revived China trade angst
NEW YORK: Wall Street stocks finished lower on Saturday ending a three-day winning streak on renewed uncertainty over US-China trade talks and disappointing Apple results.
The tech-rich Nasdaq Composite suffered the biggest drop, shedding 77.06 points (1.04 percent) to 7,356.99 following a big fall in Apple shares. The Dow Jones Industrial Average shed 109.91 points (0.43 percent) to 25,270.83, while the broad-based S&P 500 declined 17.31 points (0.63 percent) to 2,723.96.
US stocks had opened higher, in part due to optimism over trade talks after President Donald Trump said on Friday talks with China were “moving along nicely” and Bloomberg News reported that Trump had directed staff to begin drafting a potential trade agreement. But White House economic adviser Larry Kudlow poured cold water on expectations for a breakthrough, telling CNBC “there’s no massive movement to deal with trade,” in an interview that helped push stocks lower.
Trump himself told journalists that he expected a “very good deal” with China, helping to lift stocks marginally from session lows. Some analysts have taken the remarks with a grain of salt ahead of next week’s US congressional elections. “The wind was taken out of the sails” by the “walking-back” from Trump officials on trade, said Art Hogan, chief market strategist at B Riley FBR. “The largest headwind in this market is China trade.” US government data showed the world’s biggest economy added 250,000 jobs in October, well above analyst expectations. Unemployment held steady at 3.7 percent and wages rose a solid 3.1 percent above the year-ago level.
Analysts said the report should keep the Federal Reserve on track to continue hiking interest rates, including in December.
Apple slumped 6.6 percent as investors focused on lower-than-expected volume of iPhone sales, and expressed disappointment at the fourth-quarter sales outlook, which was lower than some analysts expected. But the tech giant reported a 32 percent jump in quarterly earnings to $14.1 billion. Oil giants Exxon Mobil and Chevron rose 1.6 percent and 3.2 percent after both reported big increases in third-quarter earnings, with Chevron’s profits more than doubling to $4.0 billion.
Food giant Kraft Heinz plummeted 9.7 percent after reporting a 33.3 percent fall in third-quarter profits to $630 million due to higher costs but Starbucks surged 9.7 percent after reporting a 3.0 percent rise in comparable store sales, topping analyst expectations.
China stocks gain on trade
war end hopes
Stock markets in China gained on Friday after US President Donald Trump said trade talks with Beijing were “moving along nicely”. Hong Kong’s Hang Seng jumped 3.9%, Shanghai Composite rose 2.4% and the yuan firmed. The moves also follow media reports that pointed to progress on the US-China trade dispute.
It comes ahead of a key meeting between Mr Trump and China’s President Xi Jinping at the G20 summit this month.
The event will be closely watched for any progress in the resolution of the bitter trade dispute between the world’s two largest economies.
On Thursday, comments made by Mr Trump appeared to be an attempt to ease tensions.
“Just had a long and very good conversation with President Xi Jinping of China. We talked about many subjects, with a heavy emphasis on Trade,” the US president tweeted.—AFP