US close: Markets post losses as China trade concerns circulate
Wall Street stocks turned in heavy losses by the closing bell on Wednesday, driven by much weaker than expected economic data out of China and a report that Washington was not in fact easing back in its trade war with Beijing.
The Dow Jones Industrial Average ended the session down 3.05% at 25,479.42, the S&P 500 was off 2.93% at 2,840.60, and the Nasdaq 100 was 3.08% weaker at 7,490.12.
At the open, the Dow was 462.71 points lower after a firm finish on Tuesday, which came after the White House decided to remove several items from its list of new Chinese tariffs, bouncing back from the sharp losses seen during the prior session.
The sudden shift in sentiment came as the yield on the benchmark 10-year Treasury note fell to 1.70%, leaving it only narrowly ahead of that on the two-year security at 1.67%, as investors turned toward safe-haven assets amid global growth concerns.
On Wednesday morning, both two and 10-year yields were at 1.58%, with the former having briefly risen above the latter.
Investors were giving the yield spread between the two a great deal of attention, given inversions had preceded every recession over the past 50 years.
“Now it is important to point out that an inverted yield curve has given false signals in the past on possible US recessions - around the Russia/LTCM crisis in 1998 for example - while other countries have experienced prolonged yield curve inversion in the past without recession - the UK for example through much of the 1990s,” noted analysts at ING.
“As such it is important to emphasise the obvious point there is no inevitability of recession.”
Losses accelerated during the session, however, after CNBC reported that a senior US official said that Washington's latest tariff reprieve was “not at all” an indication of a thaw in US-China relations.
Elsewhere, market focus was largely attuned to much softer-than-expected economic data from China.
China's Commerce Ministry also revealed overnight that Vice Premier Liu He had spoken with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin over the phone on Tuesday, with the trio agreeing to talk again in two weeks.
On the data front, US homeowners headed to their lenders at a rapid pace last week, with lower mortgage rates leading Americans to try and save money on their monthly payments.
Mortgage application volume jumped 21.7% last week-on-week, according to the Mortgage Bankers Association.
On a yearly basis, volume soared 81%.
Meanwhile, import prices in the US edged slightly higher in July as energy costs bounced back.
According to the Bureau of Labor Statistics, the US import price index rose at a month-on-month pace of 0.2%, pushing the year-on-year rate of increase higher to -1.8%.
On the export side of the equation, prices were also 0.2% higher on the month, but 0.9% lower year-on-year.
In corporate news, department store chain Macy's plunged 13.27% after it posted a wide miss in its second quarter earnings.
The company’s earnings per share fell to 28 cents, far below the 45 cents Wall Street was expecting from the ailing retailer.
Apparel firm Canada Goose Holdings was off 6.67% even after it reported a 59.1% jump in revenue in the first quarter, while Cisco Systems slid 4% even after it exceeded expectations on earnings.
Dow Jones - Risers
Walmart Inc. (WMT) $106.20 0.99%
Dowdupont Inc. (DWDP) $30.52 0.00%
Verizon Communications Inc. (VZ) $55.70 -0.04%
Unitedhealth Group Inc. (UNH) $243.24 -0.06%
McDonald's Corp. (MCD) $216.45 -0.41%
Nike Inc. (NKE) $81.03 -0.70%
Coca-Cola Co. (KO) $53.00 -0.93%
American Express Co. (AXP) $122.65 -1.04%
Caterpillar Inc. (CAT) $115.21 -1.06%
Procter & Gamble Co. (PG) $115.79 -1.25%
Dow Jones - Fallers
Walgreens Boots Alliance, Inc. (WBA) $50.41 -5.01%
JP Morgan Chase & Co. (JPM) $104.80 -4.15%
Cisco Systems Inc. (CSCO) $50.61 -4.00%
Boeing Co. (BA) $320.42 -3.74%
Microsoft Corp. (MSFT) $133.98 -3.33%
Apple Inc. (AAPL) $202.75 -2.98%
Chevron Corp. (CVX) $117.74 -2.95%
United Technologies Corp. (UTX) $124.31 -2.88%
Merck & Co. Inc. (MRK) $83.41 -2.86%
Exxon Mobil Corp. (XOM) $67.65 -2.84%
S&P 500 - Risers
HP Inc (HPQ) $19.28 1.74%
Dominion Energy Inc. (D) $75.33 1.14%
Walmart Inc. (WMT) $106.20 0.99%
Evergy, Inc. (EVRG) $63.77 0.96%
Broadridge Fin Sol (BR) $125.58 0.96%
Church Dwight Co Inc. (CHD) $77.66 0.94%
CenturyLink Inc. (CTL) $11.28 0.80%
Aon plc (AON) $187.30 0.59%
H&R Block Inc. (HRB) $27.17 0.54%
Charles Schwab Corp. (SCHW) $36.58 0.54%
S&P 500 - Fallers
Macy's Inc. (M) $16.80 -13.22%
Kohls Corp. (KSS) $45.11 -10.97%
Nordstrom Inc. (JWN) $26.02 -10.65%
Viacom Inc. Class B (VIAB) $26.72 -8.52%
Mylan Inc. (MYL) $18.04 -8.52%
Apache Corp. (APA) $20.09 -8.39%
L Brands Inc (LB) $20.86 -7.98%
Discovery Inc. Class A (DISCA) $27.49 -7.13%
CBS Corp. (CBS) $44.62 -7.12%
PVH Corp. (PVH) $69.36 -7.11%
Nasdaq 100 - Risers
NetEase Inc. Ads (NTES) $262.13 0.49%
Shire Plc Ads (SHPG) $179.20 0.00%
Symantec Corp. (SYMC) $23.05 -0.30%
T-Mobile Us, Inc. (TMUS) $76.93 -0.89%
Take-Two Interactive Software Inc. (TTWO) $126.22 -1.03%
Citrix Systems Inc. (CTXS) $91.29 -1.09%
O'Reilly Automotive Inc. (ORLY) $369.43 -1.10%
Charter Communications Inc. (CHTR) $375.18 -1.10%
Vodafone Group Plc ADS (VOD) $17.90 -1.21%
Sirius XM Holdings Inc (SIRI) $6.00 -1.32%
Nasdaq 100 - Fallers
Qurate Retail Inc. (QRTEA) $11.53 -8.71%
Mylan Inc. (MYL) $18.04 -8.52%
Tesla Inc (TSLA) $219.62 -6.54%
Activision Blizzard Inc. (ATVI) $45.26 -5.96%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $321.00 -5.92%
American Airlines Group (AAL) $26.10 -5.13%
Walgreens Boots Alliance, Inc. (WBA) $50.41 -5.01%
Micron Technology Inc. (MU) $42.04 -4.82%
Asml Holdings N.V. (ASML) $208.72 -4.78%
Facebook Inc. (FB) $179.71 -4.64%