Wall Street drops as Trump comments fan trade worries


(Reuters) – Wall Street’s main indexes slipped on Friday after President Donald Trump said the United States and China were pursuing trade talks but he was not ready to make a deal, exacerbating fears that the stand-off would aggravate the global economic slowdown.

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 9, 2019. REUTERS/Brendan McDermid

Trump also said the United States would continue to refrain from doing business with Chinese telecoms equipment giant Huawei Technologies.

Shares of chipmakers and other tariff-sensitive technology companies .SPLRCT fell, with the Philadelphia SE Semiconductor index .SOX down 1.5%, while Apple Inc (AAPL.O) slipped 0.5%.

“At this point in time, it’s hard to see either the United States or China having enough will to resolve their differences, much less before the new U.S. tariffs on Chinese goods kick in on September 1,” said Han Tan, market analyst at FXTM.

“Should the barriers to global trade be raised next month, that would be another kick in the gut for risk appetite and may prompt another sell-off in risk assets.”

As more investors sought safety in U.S. government bonds, U.S. Treasury yields slipped.

The three main indexes were set for a second consecutive weekly decline, wrapping up a volatile week dominated by a symbolic drop in China’s currency.

At 12:56 p.m. ET, the Dow Jones Industrial Average .DJI was down 93.11 points, or 0.35%, at 26,285.08, the S&P 500 .SPX was down 18.83 points, or 0.64%, at 2,919.26. The Nasdaq Composite .IXIC was down 77.71 points, or 0.97%, at 7,961.45.

Eight of the 11 major S&P sectors were lower, with the technology sector .SPLRCT, which bore the brunt of recent selloff, slipping the most.

With investors turning wary of risk, defensive sectors, including utilities .SPLRCU and real estate .SPLRCR, were on track to outperform this week.

Among stocks, Uber Technologies Inc (UBER.N) shed 7.0% after the ride-hailing company reported a record $5.2 billion loss and revenue that fell short of Wall Street targets.

DXC Technology (DXC.N) tumbled 30.2% after the IT and consulting services provider cut its full-year profit and revenue forecast.

Nektar Therapeutics (NKTR.O) shares plunged 32.9% after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg.

Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE and for a 1.97-to-1 ratio on the Nasdaq.

The S&P index recorded 38 new 52-week highs and nine new lows, while the Nasdaq recorded 48 new highs and 106 new lows.

Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva and Arun Koyyur

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