Stocks slide after US expands export blacklist
U.S. stocks fell Tuesday after Washington expanded the list of blacklisted Chinese companies ahead of US-China trade talks this week.
The Dow Jones Industrial Average was down 217 points, or 0.8%, while the S&P 500 and Nasdaq Composite both dropped 0.8%. [19659002] The United States added 28 Chinese entities to an export blacklist, citing their role in Beijing's suppression of Muslim minorities in northern China. China's top trade envoy, Liu He, will lead a delegation to resume trade talks with US officials in Washington on Thursday, China's trade ministry said.
Chinese Foreign Ministry spokesman Geng Shuang urged the United States to draw its attention to the Chinese companies, saying, "China will continue to take firm and strong steps to maintain its national sovereignty, our security and development interests. "
China's recent large purchases from the US soy market had signaled a potential thaw in the relationship. But China has also sought to limit the scope of trade negotiations, put aside national security issues and add to the market's concern that an immediate solution is unlikely.
"They will not reach an agreement at any cost," said Ipek Ozkardeskaya, senior analyst at London Capital Group. "Despite the optimism we see, there is a chance that this week will end with another disappointment."
Domino's Pizza Inc. shares lost 4.2% after the chain pizza restaurant said sales growth may be slower than previously anticipated.
Stoxx Europe 600 fell 0.8%, with the banking sector down 1[ads1].5%. The German DAX drops 0.9%.
Shares in London Stock Exchange Group fell 5.6% after Hong Kong Exchanges & Clearing bid $ 36.6 billion for its London rival, a deal that would unite two major trading hubs.
German industrial production grew somewhat in August, according to official data. The upturn was a surprise after a gloomy reading on Monday of production orders for the same month.
Industrial production increased 0.3% in August over July in adjusted conditions, the statistics office reports. Despite better production than expected, the industry is still in a downturn, the Ministry of Finance said.
The British pound also stumbled over political headwinds on Tuesday, falling 0.6% against the euro and down 0.5% against the US dollar, amid heightened skepticism a Brexit deal could be reached at the EU Council next week, Chris Beauchamp, chief market analyst at the e-commerce company IG Group.
President of the European Council Donald Tusk tweeted that the Prime Minister of the United Kingdom
Boris Johnson
tried to win a blame game over Brexit.
"It seems the alternatives are a no-deal Brexit or no Brexit at all, and that's probably what the choice comes for," said Joshua Mahony, a market analyst at IG Group.
According to Tradeweb, the yield on the ten-year-old German bund fell to minus 0.594%, from minus 0.572% on Monday afternoon. The return of 10-year Treasurys also went down to 1.516%, from 1.552% on Monday. Bond yields and prices move in opposite directions.
Global oil index Brent oil fell 1% to $ 57.73 a barrel and gold gained 0.5%.
Photo:
Richard Drew / Associated Press
The Japanese yen and the Swiss franc, both viewed as ports, gained 0.3% against the dollar.
In Asia, Japan's Nikkei climbed 1% and Korea's Kospi gained 1.2%. Shares in Shanghai and Hong Kong rose 0.3% as the Chinese markets returned from a holiday.
Samsung Electronics & # 39; s shares rose 2.4% after the company delivered a strong third-quarter profit forecast.
—Eva Dou contributed to this article.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
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