Market Snapshot: Stocks close slightly lower as trade optimism sours, investors keep eye on impeachment

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U.S. stocks ended slightly lower Thursday as investors grappled with downbeat news in U.S.-China trade relations and drama in Washington over a whistleblower complaint alleging President Donald Trump sought foreign election interference.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, -0.30% lost 79.59 points, or 0.30%, to 26,891.12, while the S&P 500 index SPX, -0.24% lost 7.25 points, or 0.24%, to 2,977.62. The Nasdaq Composite Index COMP, -0.58% retreated 46.72 points, at 8,030.66, a loss of 0.58%.

What’s driving the market?

Stocks pared early losses Thursday after a Bloomberg report, citing a government official, said the U.S. is unlikely to extend a waiver allowing American firms to do business with Chinese telecom giant Huawei Technologies Co., when it is due to expire in November.

The Trump administration put Huawei on a list of entities that U.S. companies are restricted from dealing with, for national security reasons, in May, though it granted a temporary reprieve from some of these restrictions shortly thereafter, and extended the waiver for another 90 days in August.

“Again, today you do have trade playing a significant role in the market,” said Kristina Hooper, chief global market strategist at Invesco, in an interview. “But keep in mind, we have a very accommodative Fed that’s providing some support to stocks.”

The news appeared to deflate hopes for a quick trade deal that grew after Trump told reporters Wednesday that an end to the U.S.-China trade war could happen “sooner than you think” and repeated that China wants “to make a deal very badly.” The Chinese Commerce Ministry confirmed China has made purchases of U.S. soybeans and pork ahead of trade talks due in October.

Investors on Wednesday had largely brushed off the decision by House Democrats to begin a formal impeachment inquiry into Trump amid a controversy over his interaction with Ukraine’s president.

But stocks again drifted lower following Thursday’s release of a whistleblower complaint from a member of the intelligence community that raised concerns about Trump’s relationship with Ukraine. Joseph Maguire, acting director of national intelligence, testified before the U.S. House Intelligence Committee about the complaint, which alleged that President Trump used the power of his office to “solicit interference” from a foreign country in the 2020 elections.

Check out: Whistleblower alleges Trump White House moved records onto separate network

Analysts remain divided on what impeachment proceedings might mean for trade negotiations. The immediate impact may be felt on the chances of passage of the USMCA trade deal with the U.S., Mexico and Canada to replace Nafta. In addition, the White House and Congress must agree on a new spending deal Nov. 21 to prevent another government shutdown.

On the economic data front, new applications for jobless benefits rose by 3,000 to 213,000 during the week ended Sept. 21, above economist expectations of 211,000 according to a MarketWatch poll.

The final estimate for second-quarter GDP growth came in unchanged at 2% annualized, the Commerce Department said Thursday. Meanwhile, the U.S. trade deficit widened slightly in August to $72.8 billion but smaller than the $74 billion consensus, according to a MarketWatch poll.

The U.S. pending home sales index rose 1.6% in August from July and 2.5% year-over-year, according to the National Association of Realtors.

“Economic data this week, by and large, has been skewed to the negative,” said Sahak Manuelian, managing director of equity trading at Wedbush Securities, in an interview, about Thursday’s stock selloff. “I think we are taking a breather here into month end.”

A spate of Federal Reserve officials made speeches Thursday. Dallas Fed President Robert Kaplan, a nonvoting member of the central bank’s interest-setting committee, advocated for more immigration to boost the economy during remarks at a conference Thursday morning. St. Louis Fed President James Bullard, a voter, spoke at a conference on minorities in banking.

Federal Reserve Vice Chairman Richard Clarida said that U.S. inflation targets reside within the central bank’s 2% target, while speaking at the San Francisco “Fed listens” event. Minneapolis Fed President Neel Kashkari, also a non-voter, said the economy needs lower interest rates, while speaking at a town hall in Billings, Montana, adding that the outlook for the economy is mixed.

Which stocks are in focus?

General Motors Co.’s GM, +1.35%  stock rose after the company and the United Autoworkers Union were reported to be close to an agreement to end a strike.

Facebook Inc. FB, -1.47%  shares fell after a report the company is the subject of a U.S. Justice Department antitrust investigation, even as a Federal Trade Commission inquiry is already under way.

Shares of Beyond Meat Inc. BYND, +11.58% rallied after McDonald’s Corp. MCD, -0.01%  said it would trial a plant-based burger made by the company at 28 restaurants in Canada.

Shares of Rite Aid Corp. RAD, +1.82%  rose after the drugstore chain reported an adjusted fiscal second-quarter profit that beat expectations, though revenue fell a bit short.

Peloton Interactive Inc. PTON, -11.17%, a web-connected exercise-equipment company, priced its initial public offering at $29 a share, the top of the targeted range, but traded slower Thursday on the Nasdaq Global Select Market.

See: Peloton stock spins in reverse during trading debut as IPO market cools down

In deal news, NGL Energy Partners L.P. NGL, -2.53%  announced Thursday an agreement to buy Hillstone Environmental Partners LLC for about $600 million from Golden Gate Capital.

How are other markets performing?

U.S. Treasury yields fell on Thursday as geopolitical jitters from Washington, Iran and the U.K. boosted demand for haven assets like U.S. government paper. The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -2.15%  dipped 4.7 basis points to 1.685%.

In commodities markets, oil futures ended only slightly lower Thursday after the U.S. Department of Defense said it was deploying equipment and forces to Saudi Arabia in the wake of the Sept. 14 attacks on the Kingdom’s production facilities. West Texas Intermediate crude oil prices for November delivery CLX19, +0.09%  fell 8 cents, or 0.1%, to end at $56.41 a barrel.

Gold futures settled higher on Thursday, a day after a surge by the U.S. dollar prompted the precious metal to suffer its worst daily decline in nearly three weeks. Gold GCZ19, -0.04%  rose to $1,515.20 an ounce. The U.S. dollar index DXY, +0.17%, meanwhile, gained against a basket of its peers, after posting its biggest one day rise in three months Wednesday.

Asian stocks traded mixed, with the China CSI 300 index 000300, -0.77%  falling 0.77%, Hong Kong’s Hang Seng Index HSI, +0.37%  adding 0.37% and Japan’s Nikkei 225 NIK, +0.13%  rose 0.13%.