NEW YORK: US stocks retreated on Tuesday (Aug 27), pulling back from the short-lived optimism on the trade war with China that inspired a brief ...
NEW YORK: US stocks retreated on Tuesday , pulling back from the short-lived optimism on the trade war with China that inspired a brief rally to start the week. In the waning trading days of the American summer holidays, traders brushed off news that US consumers remain confident about the economy and became more skeptical of President Donald Trump's repeated assertions that China wants to make a trade deal.
The Dow Jones Industrial Average lost nearly all the ground it had won on Monday, dropping 120.93 points to finish the day at 25,777.90. The broader S&P 500 fell 9.22 points to close at 2,869.16, while the tech-heavy Nasdaq lost 26.79 points to end at 7,826.95. Concerns about the slowdown in the global economy were reflected in the returns on US Treasury debt, which inverted again, meaning investors could make more on short-term investments than longer-term paper, a sign of waning confidence. Charles Schwab analysts said"early gains that came amid cooled trade tensions between the US and China fell victim to worries surrounding the persistent decline in bond rates, with the inversion between the 2-year and 10-year Treasury notes widening to heighten recession concerns."Chris Low of FTN Financial said investors were absorbing the reality that, despite Trump's rosy forecasts on Monday about the chances for a trade deal, the two sides were in fact no closer.He also pointed to unhappy economic news out of Germany, where recorded negative growth in the second quarter. Among individual companies, US healthcare giant Johnson & Johnson gained 1.4 per cent the day after an Oklahoma judge found the company liable in that state's opioid crisis but ordered it to pay only US$572 million, far less than officials had asked for.JM Smucker plunged 8.2 per cent after underwhelming quarterly results and lower earnings guidance for 2020. Tobacco manufacturer Philip Morris International worsened as the day progressed, and closed with a loss of 7.8 per cent after announcing the start ofwith its former parent company, US firm Altria Group, which wiped away early gains, dropping nearly four per cent. A survey of US consumer confidence fell less than expected for August, showing continued optimism about the economy, but that did little to spur investors.
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