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Wall Street indexes declined amid uncertainty about US-China trade talks

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The main indexes of the New York Stock Exchange ended the Thursday trading session into the red territory, due to the growing uncertainty surrounding the US-China trade talks in the final phase.

The blue-chip index Dow Jones Industrial Average slashed a 450-point drop and ended the trading session with a decline of 165.24 points, or 0.64%, to 25,802.09 points. The broader S&P 500 dropped by 0.39% to 2,868.13 points, while the technology Nasdaq Composite recorded a decline of 36.59 points, or 0.46%, to 7,906.73 points.

US 500 index

The US President Donald Trump revived the concerns about trade relations between Beijing and Washington after he said at a rally on Wednesday evening that China “breached the treaty”, reinforcing fears that both countries will not be able to reach a trade agreement before entering in force of the new customs tariffs on Friday.

Shortly before the end of the session, Trump said that it is possible for both sides to conclude an agreement by the end of this week, adding that he is likely to hold a telephone conversation with Chinese President Xi Jinping.

China’s Deputy Prime Minister Liu He is expected to meet with the US Trade Representative Robert Lighthizer and other US officials today.

Withing the other economic news, the number of people who applied for jobless benefits in the week ended May 4 fell slightly to 228,000, the Labor Department said Thursday, above the 218,000 expected by economists polled by MarketWatch.

Meanwhile, the wholesale prices rose 0.2% in April, below the 0.3% increase expected by economists. The annual increase in producer prices remained flat at 2.2%.

The US trade deficit widened in March versus February, but the bilateral deficit with China fell to the lowest level in three years, the Commerce Department said Thursday.

On the bond markets, yields on 10-year and 30-year US government bonds fell to 2.451% and 2.868%, respectively.

In the currency markets, the US dollar index, measuring the strength of the greenback against a basket of six competing currencies, declined by 0.22% to 97.41 points.

Corporate stocks performance

Tech and industrials businesses were the most vulnerable to retaliatory actions. The turmoil surrounding the trade talks was felt particularly strongly in the stock trading of microprocessor manufacturers.

Intel, which sank 5% to a three-month low, was the biggest loser on the Dow Jones industrials. The stock fell sharply below its 200-day moving average. BMO Capital Markets cut its rating to a market perform from outperform, after the chip giant forecast weaker profit margin over the next three years.

Nvidia and Micron declined by 2% and 1% respectively. The market value of the VanEck Vectors Semiconductor ETF fell by 7%.

The stocks of Apple, Boeing and 3M weighed in with losses of more than 1% apiece.

Chevron avoided the downdraft with a 3% gain amid reports it won’t sweeten its 33 billion USD bid for Anadarko Petroleum. Anadarko is expected to accept a 38 billion USD offer from Occidental Petroleum.

The top performers on the S&P 500 were Tapestry Inc (+8.49%), Perrigo Company PLC (+6.99%) and Mylan NV (+3.97%), while on the flip side were Chesapeake Energy Corporation (-7.27%), Occidental Petroleum Corporation (-6.44%) and Intel Corporation (-5.32%).

Corporate earnings reports

Harsco Corporation today reported Q1 2019 results. The company’s diluted earnings per share from continuing operations were 0.26 USD, which included costs to implement Rail’s productivity improvement initiative and professional fees incurred to support and execute the company’s growth strategy, partially offset by a non-cash foreign currency translation gain related to a previous site exit. Excluding these items, diluted earnings per share from continuing operations in the first quarter of 2019 were 0.29 USD. The operating income from continuing operations for the first quarter of 2019 was 38 million USD. Excluding unusual items, operating income was 42 million USD, compared to the Company’s previously provided guidance range of 36 million USD to 43 million USD.

Diana Shipping reported quarterly earnings of 0.07 USD per share, beating the analysts’ estimate of 0.04 USD per share. This compares to a loss of 0.04 USD per share a year ago. This quarterly report represents an earnings surprise of 75%. A quarter ago, it was expected that this shipping company would post earnings of 0.07 USD per share when it actually produced earnings of 0.01 USD. Diana Shipping posted revenues of 60.30 million USD for the quarter ended March 2019. This compares to year-ago revenues of 48.37 million USD.

Norwegian Cruise Line posted revenues of 1.40 billion USD for the quarter ended March 2019, surpassing the analysts’ forecasts. The company came out with quarterly earnings of 0.83 USD per share.