Wall Street falls on fresh trade jitters | Money

A trader works on the trading floor at the New York Stock Exchange September 4, 2019. — Reuters pic
A trader works on the trading floor at the New York Stock Exchange September 4, 2019. — Reuters pic

NEW YORK, Oct 31 — US stocks dropped today as uncertainty around a potential trade deal between United States and China overshadowed strong earnings reports from Apple and Facebook.

Chinese officials have doubts about whether it is possible to reach a comprehensive long-term trade deal with Washington and US President Donald Trump, Bloomberg reported earlier in the day.

“This headline news (on trade) is giving investors a reason to take some profits off the table,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The tariff war between the world’s two biggest economies has disrupted supply chains and roiled financial markets for more than a year.

The trade-sensitive industrials sector dropped 0.86 per cent. Chipmakers, which have a sizeable exposure to China, also fell, with the Philadelphia Semiconductor index slipping 1.44 per cent.

However, corporate earnings were a bright spot. Apple Inc rose 1.5 per cent after the iPhone maker forecast sales for the holiday shopping quarter ahead of expectations.

Facebook Inc jumped three per cent after reporting an uptick in users in lucrative markets and its third straight rise in quarterly sales growth.

Nine of the 11 major S&P 500 sectors were trading lower. The interest-rate sensitive financial sector dropped 0.73 per cent, tracking a drop in US Treasury yields.

The US Federal Reserve lowered borrowing costs for the third time this year yesterday and signalled there would be no further cuts unless the economy takes a turn for the worse.

Investors will now eye the Labor Department’s jobs data tomorrow, which will shed light on the strength of the US economy.

“In general, on the vigil of the key data of the month which is the employment data tomorrow, investors tend to hold off any bets until they digest the numbers,” Cardillo said.

At 10am ET the Dow Jones Industrial Average was down 100.26 points, or 0.37 per cent, at 27,086.43, the S&P 500 was down 9.49 points, or 0.31 per cent, at 3,037.28 and the Nasdaq Composite was down 17.70 points, or 0.21 per cent, at 8,286.28.

Among other stocks, Starbucks Corp rose 0.7 per cent as the coffee chain topped quarterly same-store sales and revenue estimates.

Twitter Inc dropped three per cent after the company said it will ban political advertising on its platform next month.

Declining issues outnumbered advancers for a 1.91-to-1 ratio on the NYSE and for a 2.09-to-1 ratio on the Nasdaq.

The S&P index recorded 21 new 52-week highs and one new low, while the Nasdaq recorded 42 new highs and 41 new lows. — Reuters

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