Business

Stocks recover early losses on strong consumer data

Stocks recovered earlier losses Friday after the release of stronger sentiment data quelled trade fears.

The Dow traded 10 points higher, erasing a 200-point drop, while the S&P 500 and Nasdaq traded below the flatline but also were off earlier lows.

The University of Michigan’s Surveys of Consumers showed consumer sentiment surged to its highest level in 15 years to start off the month. Richard Curtin, chief economist at the Surveys of Consumers, said consumers view the economy “much more favorably.” However, most of the data was collected before the recent spike in U.S.-China trade tensions.

Equities started off the session with a sharp drop as China and the U.S. continue their tussle on the trade front.

Chinese Commerce Ministry spokesman Gao Feng said Thursday, according to state-run news agency Xinhua, that the U.S. is exhibiting “bullying behavior” with its latest moves on the trade front, noting it is “regrettable that the U.S. side unilaterally escalated trade disputes, which resulted in severe negotiating setbacks.”

The U.S. hiked tariffs on $200 billion worth of Chinese goods last week while China retaliated Monday with higher levies on $60 billion worth of U.S. products. The moves led to a massive sell-off to start off the week. But the major indexes have clawed back most of their losses through Thursday’s close.

President Donald Trump’s administration then moved to make it harder for U.S. companies to do business with Huawei, a giant telecommunications company in China. Shares of U.S. suppliers like Qualcomm, Qorvo and Micron Technology fell 0.8%, 3.3% and 1.1%, respectively.

“Through any lens, this is a broadside against the Chinese government, which is generally considered to be the beneficial owner of Huawei,” said Tom Essaye, founder of The Sevens Report, in a note. “This obviously ups the ante in the US-China trade war as the stakes are growing. At this point, it’s unclear how China will respond, but some sort of response is expected.”

Chinese stocks fell sharply overnight. The Shanghai Composite dropped 2.5% and posted its longest weekly losing streak since July 2018.

Trade fears were partially quelled on Friday after the Trump administration announced it would delay slapping tariffs on foreign-made cars by six months. Stock futures briefly pared losses on the news.

Investors also fretted over a breakdown in Brexit talks. The U.K.’s two largest political parties failed to strike a deal on the country’s exit from the European Union after six weeks of talks. Jeremy Corbyn, the Labour Party leader, told Prime Minister Theresa May that talks had “gone as far as they can go. ” Sterling fell 0.5% to $1.2736.

Friday’s move lower put the major indexes on track to snap a three-day winning streak. Stocks posted solid gains on Thursday, largely driven by strong earnings from Walmart and Cisco Systems.

|CNBC NEWS

Tags
Show More

GWO

Is a network hub designed to bring you news from various media groups in Ghana,Africa and around the world to keep you informed and educated as you go about your daily lives. Disclaimer: The views of each article are the sole responsibility of the author and do not reflect that of Ghana web online.We are not responsible for any misinformation or incorrect statement. If you need any more clarification on an article please direct them to the original source.All contents belong to their respective owners,we do not own it.

Related Articles

Back to top button
Close