S&P 500 and Nasdaq Composite rally to finish higher
Dow Jones finishes in the red
Trump unrepentant over trade war fears
US markets have had worse days – this week, in fact – so a 71 point fall for the Dow could be counted as an acceptable outcome.
Markets have been thrown into turmoil by president Trump's unexpected announcement yesterday of plans to introduce import tariffs on steel and aluminium imports, which some reports are suggested was announced without any internal review by his internal advisors.
Good god. Read this story. It's horrifying.
Trump was angry and 'unglued' when he started a trade war, officials say https://t.co/o35ONXjCUv via @nbcnews
— Kurt Eichenwald (@kurteichenwald) March 2, 2018
Having shed 420 points yesterday, the Dow Jones average looked as if it might give a repeat performance today, falling as low as 24,218 at one point before recovering to close at 24,538.
The S&P 500, meanwhile, rose 14 to close at 2,691 while the tech-heavy Nasdaq Composite advanced 77 points to 7,258.
In Canada, the S&P TSX Composite dipped 9 points to 15,385.
Mid-session: Blue-chips pare early losses
US blue-chips have pared early losses but the Dow Jones is still showing a triple-digit fall.
The Dow was down 164 at 24,445 while the S&P 500 was down 3 at 2,674 as pundits pontificated over the impact if president Trump goes through with his stated plan to introduce tariffs on steel and aluminum imports.
Open: Stocks take another battering
Stocks were taking another shellacking in early trading as fears of an escalating trade war grew.
Via his Twitter account, president Trump addressed these concerns by saying that “trade wars are good” when you are the country that is “losing many billions of dollars on trade with virtually every country it does business with”.
Traders appeared to take a different view, resulting in the Dow Jones Average plummeting 292 points to 24,317 and the S&P 500 plunging 20 points to 2,657.
“Trump has long been accused of prioritising protectionist populist measures over those that will benefit both domestic and global growth, something he has repeatedly dismissed, claiming the measures being considered were aimed at making trade fair and reciprocal. He may be able to persuade his core voter base of that but investors are far from convinced, as was evident by the market reaction to the announcement [of import tariffs on steel and aluminum],” said Craig Erlam at Oanda.
“This move isn’t only bad for steel and aluminium producers, protectionist measures such as tariffs are bad for everyone whose costs have now increased, which impacts companies and end consumers,” he added, warning that “other countries will now consider counter-measures against the US which won’t necessarily target this particular sector”.
When a country (USA) is losing many billions of dollars on trade with virtually every country it does business with, trade wars are good, and easy to win. Example, when we are down $100 billion with a certain country and they get cute, don’t trade anymore-we win big. It’s easy!
— Donald J. Trump (@realDonaldTrump) March 2, 2018
On the corporate front, Babcock & Wilcox Enterprises Inc (NYSE: BW) lost around a quarter of its value after it announced plans to raise at ;east US$182mln through a rights issue.
The rights offering will be priced at $3.00 per share; the shares fell US$1.52 to US$4.57 on the news.
The net proceeds from the rights offering, along with additional borrowings under the revolving credit facility, will be used to repay in full the company's second-lien term loan, on which it is currently in default.
Pre-open
A downbeat start looks in prospect for US markets after president Trump's protectionist move.
Dow futures are down 194 points, the index having closed 420 points lower yesterday, while S&P 500 futures are trading over 13 points lower.
The Nasdaq futures are down more than 53 points.
Yesterday, president Trump dropped a bombshell by saying he would impose an import tariff on steel and aluminum in a bid to protect US jobs.
On the corporate front this morning, retailers have been hogging the spotlight.
Foot Locker Inc (NYSE:FL) shares were taking a shoeing after the sportswear seller reported a fiscal fourth-quarter loss of US$49mln, equivalent to 40 cents a share.
Excluding one-off charges and adjustments, earnings per share were positive at US$1.26.
Like-for-like sales, a key measure of a retailer's fortunes, were down 3.7% year-on-year in the 14 weeks to February 3; analysts had expected a decline of 2.4%.
Richard Johnson, the retailer’s chairman and chief executive said: "The dramatic shifts influencing the expectations and behaviors of our customers continued to affect our business in the fourth quarter, just as they have throughout 2017."
"The first quarter of 2018 will likely see the continuation of sales and margins in line with trends in the second half of 2017," added chief financial officer Lauren Peters.
The shares were down 7.4% at US$42.50 ahead of the start of open outcry trading.
A more severe slide was experienced by J C Penney (NYSE:JCP), down 11.7% at US$3.46 after its fourth-quarter numbers.
Like-for-like (LFL) sales growth was on the light side at 2.6% versus expectations of year-on-year growth of 2.7%.
Revenue rose to US$4.03bn from US$3.96bn the year before and was roughly in line with expectations.
The retailer expects LFL sales to be anywhere from flat to up 2% year-on-year; the consensus forecast among analysts following the stock is for growth of 0.7%.
The world's biggest retailer by turnover, Walmart Inc (NYSE:WMT) was down US$1.27 at US$87.81 after broker Oppenheimer cut its price target from US$110 to US$93 and downgraded the stock to 'perform' from 'outperform'.