U.S. Stocks Slip as Trade Skirmish Drags On
May 20 2019 - 9:05AM
Dow Jones News
By Avantika Chilkoti
U.S. stocks opened lower Monday, as investors continued to weigh
the impact of souring U.S.-China trade negotiations.
The Dow Jones Industrial Average fell 117 points, or 0.4%, to
25646 shortly after the opening bell. The S&P 500 dropped 0.6%
and the Nasdaq Composite declined 1.2%.
In Europe, the Stoxx Europe 600 was down 1.1% in midmorning
trading. In Asia, the Shanghai Stock Exchange dropped 0.4% and Hong
Kong's Hang Seng Index fell 0.6%. Japan's Nikkei gained 0.2%.
Tensions between the U.S. and China have heated up over the past
week amid tit-for-tat tariff increases from both sides, even as
negotiators continued to try to thrash out a deal.
Trevor Gurwich, a senior portfolio manager at American Century
Investments, said many investors have been surprised by the
reemergence of tensions between the world's two largest
economies.
"The market is too sanguine about expecting a quick, easy trade
deal," he added, pointing to the complexity of the negotiations,
which could cover issues like intellectual property law.
At this stage, the main issue is gauging the impact of fresh
uncertainty on the global economy through weakened sentiment and
via financial markets, according to Marco Valli, head of macro
research at UniCredit, rather than the direct impact of lower
global trade.
The 10-year U.S. Treasury yield on Monday ticked down to 2.387%,
from 2.396% on Friday. Yields move inversely to prices. German
10-year government bonds were in negative territory at -0.098%.
Shares of the Sprint rose 24% after FCC Chairman Ajit Pai
recommended approval of the company's merger with T-Mobile US Inc.
Shares of T-Mobile were up 5%.
Shares in Germany's largest lender Deutsche Bank briefly dropped
below an all time low and were down 3% after analysts at UBS
recommended investors sell the stock, setting a price target of
EUR5.70 ($6.36), compared with a price of EUR6.73 ($7.51) on
Monday.
The transportation and technology services sectors also dragged
European markets lower on Monday. Ryanair dropped 3.7% after the
Dublin-based carrier posted disappointing earnings.
Meanwhile, India's benchmark Sensex equities index was up 3.8%
and the rupee gained 0.8% on the dollar after exit polls released
Sunday showed Prime Minister Narendra Modi is likely to return for
another five years at the helm of the world's second most populous
nation.
This week, investors will be watching for data on U.S. home
sales and eurozone purchasing managers surveys on Thursday.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
May 20, 2019 09:50 ET (13:50 GMT)
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