Wall Street slips on political tensions, recession fears
(Reuters) – U.S. stocks slipped on Monday as political tensions around the world and fears that a prolonged U.S.-China trade war would push the global economy into recession sapped risk appetite.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 12, 2019. REUTERS/Eduardo Munoz
Protests in Hong Kong that crippled one of the busiest airports of the world and defeat of President Mauricio Macri during primary elections in Argentina bolstered demand for safe-haven assets, including the Japanese yen, gold and U.S. Treasuries. [US/]
Over the weekend, Goldman Sachs Group Inc said fears of the U.S.-China trade war leading to a recession were growing and that it no longer expected a trade deal before the 2020 U.S. presidential election.
Trade-related worries have pulled the benchmark S&P 500 about 4% away from its all-time high hit in late-July.
“I don’t think the trade war is going to end any time soon, it could drag on into 2020 … then you have geopolitical concerns,” said Ryan Nauman, market strategist at Informa Financial Intelligence in Zephyr Cove, Nevada.
“There isn’t a whole lot that investors can hang their hats on right now. You just don’t have solid corporate earnings or real strong fundamentals other than the labor market.”
At 10:54 a.m. ET, the Dow Jones Industrial Average was down 198.31 points, or 0.75%, at 26,089.13, the S&P 500 was down 18.95 points, or 0.65%, at 2,899.70. The Nasdaq Composite was down 51.14 points, or 0.64%, at 7,908.00.
Ten of the 11 major S&P sectors were in the red, with the S&P 500 financial index shedding 0.85% and leading the losers. The bank sub-sector tumbled 1.64%, as lower bond yields hit shares of interest-rate sensitive lenders.
Microsoft Corp and Amazon.com Inc fell about 0.6% each, weighing heavily on the S&P 500.
Amgen Inc rose 4.6% as a U.S. judge upheld two patents relating to blockbuster rheumatoid arthritis drug Enbrel, denying a challenge by Novartis AG, which is seeking to launch a copycat version.
CBS Corp and Viacom Inc are in the final stages of negotiating an all-stock merger that values Viacom at a discount to its closing price on Friday, two sources told Reuters. Viacom shares fell 3.6%.
Declining issues outnumbered advancers for a 2.10-to-1 ratio on the NYSE and for a 1.84-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and 12 new lows, while the Nasdaq recorded 29 new highs and 111 new lows.
Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva