US close: Markets end lower as Trump and Kim talk denuclearisation
US stocks finished in the red on Wednesday, as investors kept an eye on the summit taking place between Donald Trump and North Korea leader Kim Jong Un.
Dow Jones I.A.
38,085.80
04:30 15/10/20
Nasdaq 100
17,430.50
12:15 25/04/24
The Dow Jones Industrial Average ended the day down 0.28% at 25,985.16, the S&P 500 lost 0.05% to 2,792.38, and the Nasdaq 100 was off 0.09% at 7,117.00
At the open, the Dow dropped 85 points to trade below the 26,000 mark one more, as Trump and Kim kicked-off a second round of talks in Hanoi, Vietnam, where the pair were discussing the denuclearisation of the Korean Peninsula.
The US president also took some time to fire shots at his former lawyer Michael Cohen, whom he branded as a "con man," a "cheat" and a "racist".
Trump said Cohen was "lying in order to reduce his prison time" and that "he did bad things unrelated to Trump."
Cohen testified that Trump didn't have surgery for a bone spur, the President's reason for claiming a medical deferment to avoid military service during the Vietnam War.
"I find it ironic, President Trump, that you are in Vietnam right now," said Cohen.
Meanwhile, geopolitical tensions were also expected to weigh on sentiment after Pakistan said it shot down two Indian jets on Wednesday and carried out air strikes in Kashmir.
“With too many open-ended issues clouding the trading landscape, the Western markets stood little chance of shaking Wednesday’s losses,” said SpreadEx analyst Connor Campbell.
“China vs the US, Trump vs Kim Jong-un, Michael Cohen vs Trump, India vs Pakistan, UK vs EU, Tories vs Tories, Labour vs Labour - the long list of market-disrupting disagreements and showdowns was too much for investors, who clearly decided that things were a tad too spicy for their liking.”
Further testimony from Fed chair Jerome Powell was also on the agenda, after he reiterated on Tuesday that the Fed needed to be "patient" when it comes to policy.
“Although Powell delivered an encouraging assessment of the economy, he did acknowledge the multiple headwinds both domestically and externally,” said Lukman Otunuga, research analyst at FXTM.
“A string of disappointing economic reports from the United States have triggered concerns over growth prospects, while geopolitical risks and fears of plateauing global growth are compounding the uncertainty.”
On the data front, America's shortfall in trade on goods with the rest of the world jumped at the end of 2018
The deficit in trade on goods widened by 12.8% month-on-month to reach $79.5bn, easily overshooting economists' forecasts for an increase to $75.3bn.
Goods exports declined by 2.4% versus November to reach $135.7bn, while imports rose by the same proportion to $215.2bn.
According to Pantheon Macroeconomics' Ian Shepherdson, no more than half the drop in exports, "and likely less", could be attributed to the drop in crude oil prices.
On the back of Wednesday's figures, Shepherdson said that the rate of growth in fourth quarter US gross domestic product was now likely to be revised down by four-tenths of a percentage point to 1.9%.
Meanwhile, an advanced look at wholesale inventories showed a 1.1% increase in December and an early look at retail inventories revealed a 0.9% gain at the end of the calendar year.
Durable goods orders came in on target at 1.2%.
Elsewhere, US pending home sales rebounded 4.6% in January, well ahead of the 0.4% increase expected by economists, according to the National Association of Realtors.
The NAR's pending home sales index improved to a reading of 103.2, while December's reading was revised to 98.7 from 99.0.
Lastly, US factory orders for December came in at 0.1%, short of the 0.6% reading expected by economists but ahead of the -0.06% recorded back in November.
In corporate news, shares in hardware retailer Lowe’s moved ahead 2.47% despite its fourth-quarter sales missing analysts’ expectations.
Consumer electronics peddler Best Buy was trading 14.21% firmer as its earnings and sales for the fourth quarter topped analysts’ expectations.
Chesapeake Energy shares were 10.27% higher after it posted a 57% jump in quarterly profit.
Dean Foods was down 13.85% at the close as the food and beverage group reported a wider-than-expected quarterly loss and said it was exploring options for the company, including a sale.
Weight Watchers plunged 34.49% after its earnings late on Tuesday fell short of expectations.