All US benchmarks extend losses
DJIA plunge 424.69 points
Trade war with China remain main concern
President Trump signs US$1.3trln spending bill
US shares closed in the red, extending losses from Thursday, spooked by a potential looming trade war between the US and China.
The market paid no attention to the US$1.3trln bill that President Donald Trump signed to fund the government until October, despite initially threatening to veto it if it failed to include provisions for a border wall.
Focus remained on a posisble trade war, heightened after China retaliated and slapped tariffs on US$3bn worth of US goods but stayed clear from imposing penalties on others like soybeans, sorghum and Boeing aircraft.
Even news that the White House had provided a temporary exemption on its steel and aluminium tariffs for the EU and six other nations, failed to impress the market.
From BMO chief economist Doug Porter:#trade #tradewar #China #USeconomy #economy#NAFTA #WTO #Trump #WilburRoss pic.twitter.com/XuKqktThKO
— Don Curren (@dbcurren) 23 March 2018
"There was plenty of good news this morning: durable goods and the signing of the spending bill, but investors could not shake off uncertainty created by Trump administration when it comes to trade with China," said Erin Browne, from UBS Asset Management.
She added: "Investors had been long financials and technology stocks since December and with higher interest rates, the unwind is hitting these sectors the most."
The Dow Jones Industrial Average lost ground, down sharply by 1.77% at 23,533.20, dropping 424.69 points.
The S&P 500 also lost ground, slipping 2.10% to close at 2,588.26, while the tech-heavy Nasdaq, was the heaviest faller percentage-wise, down 2.43% to end the day at 6,992.67.
Dropbox Inc (NASDAQ:DBX) which made its debut today, closed up 35.62% at US$28.48, but off its earlier high of US$31.60. It had priced its IPO at US$21 per share late Thursday.
Micron Technology Inc (NASDAQ:MU) fell 7.99% to close at US$54.21 after its results beat market expectations.
Nike Inc (NYSE:NKE) closed off highs, up 0.33% at US$64.63 after beating analysts’ forecasts with its third-quarter earnings and signaled a turnaround in its core North American market.
Wynn Resorts Limited (NASDAQ:WYNN) shares gained 0.19% to close at US$175.88 after ex-boss Steve Wynn, who stepped down earlier this year sold his last 8mln shares in the company at US$175 each to unnamed buyers.
Pfizer Inc (NYSE:PFE) lost 3.12% at US$34.57 after announcing that its late-stage trial of Chantix in adolescent smokers failed to meet the main goal.
MID-SESSION
After opening in directionless trade, stocks decided to move into the red, over the prospect of a deepening global trade war between big trading nations, the US and China.
Market sentiments turned cautious after China slapped tit-for-tat tariffs on US goods after President Donald Trump on Thursday imposed tariffs on at least US$50bn of Chinese goods.
Gold and the Japanese yen remained a comfort for traders as they sought the “safe” investments.
China retaliated with their own set of punitive tariffs, sparking concerns that this may turn into a full scale global trade war between the two big trading nations.
On the data front, for February, durable-goods orders rose 3.1%, the largest gain seen since last summer, and reversing the drop at the start of the year.
Sales of newly-constructed homes were little changed in February from the previous month, but was up 0.5% year-on-year.
And to add to the mix, Atlanta Fed President Raphael Bostic said he is likely to support more interest-rate hikes this year as there are upside risks to both the GDP and employment.
Wouter Sturkenboom from Russell Investments said: “After a selloff on Thursday, markets are consolidating, perhaps investors assessing just how bad the escalation by China will be. China stood up to the U.S. in a measured way, but I doubt they would want to invite a second round of tariffs.”
“In the short term, China has more to lose due to tariffs, but in the long term, everybody loses, with consumers picking up the tab,” he warned.
In mid-session trade, the Dow Jones Industrial Average lost ground, down 0.09% at 23,922.16, after plunging 724 points on Thursday.
The S&P 500 was up 0.41% at 2,632.49, while the tech-heavy Nasdaq, lost 0.68% at 7,116.76.
Dropbox Inc (NASDAQ:DBX) which made its debut today, saw its shares soar 42.76%. It had priced its IPO at US$21 per share late Thursday.
Micron Technology Inc (NASDAQ:MU) shares slipped further, down 6.79% after the chip maker beat expectations with both its earnings and its outlook, but also said it planned to invest in new fabrication sites.
Nike Inc (NYSE:NKE) shares gained 2.6% after the world’s largest sports brand beat analysts’ forecasts with its third-quarter earnings and signaled a turnaround in its core North American market.
Wynn Resorts Limited (NASDAQ:WYNN) shares were up 1.47% on news that ex-boss Steve Wynn, who stepped down earlier this year had - through privately negotiated transactions - sold his last 8mln shares in the company at US$175 each to unnamed buyers.
Also, the Las Vegas company said it was selling 5.3mln shares to Macau based casino firm Galaxy Entertainment at a price of US$175 per share.
Pfizer Inc (NYSE:PFE) lost 1.47% after announcing that its late-stage trial of Chantix in adolescent smokers failed to meet the main goal.
OPEN
US benchmarks seem undecided as the meander between positive and negative territory, as traders monitor developments in a possible impending trade tiff between the US and China.
After President Donald Trump announced the imposition of tariffs on Chinese goods, the Chinese retaliated with their own set of punitive tariffs, sparking concerns that this may turn into a full scale global trade war between the two big trading nations.
As is the norm in such situations, traders turned to safe havens, gold and the Japanese yen.
Barclays' chief US economist Michael Gapen said: “Antitrade policies, particularly tariffs, act like a tax on consumers and business by raising the cost of trade. By creating uncertainty, they also weigh on asset valuations, which could weaken households’ ability to sustain spending, and they likely reduce the incentive for business to invest.”
In early trade, the Dow Jones Industrial Average was up 0.31% at 24,031,73 , after plunging 724 points on Thursday.
The S&P 500 was up 0.19% at 2,647.04, while the tech heavy Nasdaq, lost 0.03% at 7,151.01.
In London, FTSE 100 is down over 101 points at 6,937 as the blue-chip benchmark fell below the 7,000 level as traders fretted over a possible interest rate hike in May , although the Bank of England kept rates on hold today at a policy meeting.
Analysts adjust Micron targets after earnings https://t.co/dxg2WcgmTp $MU $MRVL
— Breaking News (@MarketCurrents) 23 March 2018
On the corporate front, Micron Technology Inc (NASDAQ:MU) shares slipped 4.43% despite market-beating earnings but it also unveiled plans to spend money on its fabrication sites.
Nike Inc (NYSE:NKE) shares jumped 3.67%, extending gains yesterday after its third quarter sales beat market expectations and despite slipping into the red.
Pfizer Inc (NYSE:PFE) lost 0.72% after announcing that its late-stage trial of Chantix in adolescent smokers failed to meet the main goal.