Global Stocks Dip on China/US Trade 09/24 15:57
Global stocks took small losses Monday after China reportedly pulled out of
trade talks with the U.S. Industrial companies and banks suffered some of the
worst declines among American stocks.
NEW YORK (AP) -- Global stocks took small losses Monday after China
reportedly pulled out of trade talks with the U.S. Industrial companies and
banks suffered some of the worst declines among American stocks.
The U.S. and China officially began taxing larger amounts of each other's
goods Monday, and the Wall Street Journal reported that China pulled out of
talks that could have led to a new round of negotiations to end the trade war.
The U.S. is now taxing another $200 billion in Chinese imports at a rate of
10 percent, and China added taxes of 5 to 10 percent on $60 billion in U.S.
products. Oil prices jumped after OPEC decided not to produce more oil.
Technology and health care companies rose, leaving U.S. indexes only
"The market's been remarkably resilient over the last couple of months while
trade tensions were heating up," said Terry Sandven, chief equity strategist at
U.S. Bank Wealth Management.
Sandven said the trade spat will endure past the midterm elections in
November, but stocks are likely to keep rising because of strong earnings
growth for U.S. companies, combined with low inflation and low interest rates.
The S&P 500 index fell 10.30 points, or 0.4 percent, to 2,919.37. The Dow
Jones Industrial Average lost 181.45 points, or 0.7 percent, to 26,562.05. Both
the S&P 500 and Dow set record highs last week.
The Russell 2000 index of smaller-company stocks dropped 7 points, or 0.4
percent, to 1,705.32. The Nasdaq composite rose 6.29 points, or 0.1 percent, to
After a volatile stretch early this year, the S&P hasn't risen or fallen 1
percent in a day since late June.
Sandven noted that this year's stock gains have been concentrated in
technology, retail and health care companies. That was the case Monday, as
Apple gained 1.4 percent to $220.79 and drug and infant formula maker Abbott
Laboratories advanced 3.5 percent to $71.44. Sandven said it would be an
encouraging sign for the market if other sectors do better.
U.S. investors were occupied with other news. OPEC and key allies like
Russia decided not to increase their oil output further. Production is falling
in some OPEC nations, including Iran, which faces new sanctions from the U.S.
Benchmark U.S. crude gained 1.8 percent to $72.08 a barrel in New York while
Brent crude, the international standard for oil prices, rose 3 percent to
$81.20 a barrel in London, its highest price in more than three years.
Airlines and other transportation companies fell as investors anticipated
they will have to pay higher prices for fuel.
Late Friday Comcast won an auction for majority control of British satellite
TV giant Sky. Its final offer was worth about $39 billion and topped an offer
from Twenty-First Century Fox, which is already a major Sky shareholder.
In London, Sky shares jumped 8.6 percent. Comcast sank 6 percent to $35.63,
while Fox rose 1.5 percent to $45.01. Disney, which is buying Fox, climbed 2.1
percent to $112.77.
Barrick Gold will buy competitor Randgold Resources for $6.1 billion in
stock. The merged company will combine Randgold's African mines with Barrick's
holdings in the Americas to form the world's largest gold miner.
Barrick rose 5.4 percent to $11.04 and Randgold gained 6.6 percent to
Subscription radio company Sirius XM says it's buying music streaming
service Pandora Media. The deal will expand its service beyond cars and into
homes and other areas. The companies valued the deal at about $3.5 billion in
Sirius sank 10.3 percent to $6.26 and Pandora slid 1.2 percent to $8.98.
An Italian newspaper reported that the Versace group is on the verge of
announcing that it will be acquired, and Bloomberg and Reuters reported that
luxury fashion and handbag maker Michael Kors is the buyer. The Italian
publication, Corriere della Sera, said the deal is worth 2 billion euros ($2.4
Michael Kors stock skidded 8.2 percent to $66.71.
Markets in Europe edged lower while Asian indexes took sharper losses.
Germany's DAX fell 0.6 percent and the CAC 40 in France lost 0.3 percent. The
FTSE 100 in Britain dipped 0.4 percent. Hong Kong's Hang Seng index fell 1.6
percent and India's Sensex gave up 1.5 percent. Markets in Japan and South
Korea were closed for national holidays.
Marijuana-related companies continued to make dramatic moves. Biotechnology
company Intrexon soared 31.5 percent to $19.07 in heavy trading after it said
it engineered a strain of yeast to produce chemical compounds found in
marijuana consistently and at low cost. Scientists say that's been a problem in
researching the drug.
Canadian medical marijuana company Tilray sank 19.1 percent to $99.50, its
third consecutive big loss. Before that, the stock's value nearly tripled over
the course of a week and a half.
Bond prices fell. The yield on the 10-year Treasury note rose to 3.08
percent from 3.06 percent.
In other commodities trading, wholesale gasoline rose 1.9 percent to $2.05 a
gallon. Heating oil added 2.7 percent to $2.29 a gallon. Natural gas gained 2
percent to $3.04 per 1,000 cubic feet.
Gold added 0.3 percent to $1,204.40 an ounce. Silver lost 0.1 percent to
$14.34 an ounce. Copper fell 0.8 percent to $2.84 a pound.
The dollar rose to 112.73 yen from 112.52 yen. The euro edged up to $1.1758