Stocks fell on Tuesday as trade tensions between the U.S. and key partners increased to start off the one of the toughest parts of the year for equity investors.
The Dow Jones Industrial Average declined 150 points with Nike and Verizon underperforming. The S&P 500 pulled back 0.5 percent with telecom and tech lagging. The Nasdaq Composite also dropped half a percent, led by a decline in Facebook shares.
— RELATED—
For the First Time Ever, a Former Wall Street Hedge Fund Manager
Reveals How You Can Unlock the Secret “Backdoor” Into…
Washington’s Private “Pension Plan”
…And collect up to $11,334 per month thanks to this “off-the-books” retirement income source that pays retired congressmen and government insiders millions each year…
They’ve been praying you’d never find out about this…
Last week, the U.S. and Canada failed to secure an agreement to replace the current NAFTA pact by last Friday’s deadline. While a deal has been arranged with Mexico, President Donald Trump tweeted over the weekend that there was “no political necessity to keep Canada in the new NAFTA deal.”
Trump added that Congress shouldn’t intervene in the talks, and claimed that if it did, he would “simply terminate NAFTA entirely.” Trade talks with Canada are however expected to reignite this week.
Meanwhile, a Bloomberg report last week suggested that the U.S. administration was on standby to inflict additional levies on $200 billion worth of Chinese goods as soon as this week. In an interview with the same media outlet, Trump warned that he would consider removing the U.S. from the World Trade Organization (WTO) if it doesn’t “shape up.”
Shares of trade-sensitive companies Caterpillar and Boeing fell 1 percent and 0.3 percent, respectively.
European equities fell broadly as well as trade worries lingered. The Stoxx 600 index dropped nearly 1 percent while the German Dax pulled back 1.4 percent. Asian stocks were mixed, however, as Chinese markets rose while Japanese shares slipped.
Drew Angerer | Getty Images News | Getty Images
Traders and financial professionals work on the floor of the New York Stock Exchange (NYSE) ahead of the opening bell.
Investors are also keeping an eye on emerging markets as they get pressured by rising trade fears and a strong dollar. In Turkey, the lira has lost at least 40 percent of its value in 2018 over concerns surrounding President Recep Erdogan’s policies and the economy.
And the Argentinian government asked the International Monetary Fund (IMF) for an early release of funds from the nation’s $50 billion standby financing deal last week — a move that surprised markets and put the peso under pressure.
The U.S. dollar rose 0.4 percent to 95.54 against a basket of currencies.
— RELATED—
Wall Street’s “$15 Trillion Man” Shows HOW ANYONE Can Grow 200% Richer…
And Retire Years Sooner… Without Stocks!
Stocks are coming off their best August performance in more than four years as the S&P 500 and Nasdaq both reached all-time highs. The Dow, meanwhile, entered September just 2.5 percent below its record high.
“We may have overextended a little bit” to the upside, said John Augustine, chief investment officer at Huntington Private Bank. “We could see a modest pullback in the next couple of months.”
“Moving about 7 percent to the upside in the summer before mid-term elections is unusual,” Augustine said. He also noted some of the risks investors face include the sharp declines in emerging markets as well as weakness in housing and autos data.
September has historically been a tough part of the year for investors. Since 1950, September has been the worst month for the Dow and the broader S&P 500, according data from “Stock Trader’s Almanac.” The Dow averages a decline of 0.7 percent, while the S&P 500 falls 0.5 percent on average in September, the data show. The Nasdaq, which was introduced in 1971, falls half a percent on average.
Losses in September for the Dow and Nasdaq widen in mid-term election years, while the S&P 500’s average decline narrows slightly in such years, according to the data.
Facebook shares dropped 1.7 percent after analysts at MoffettNathanson downgraded them to neutral from buy. The analysts a “toxic brew” of slowing sales growth and regulation risk.
Source: cnbc.com | Original Link