US stocks slide unexpectedly after retail
U.S. stocks fell on Wednesday as economic data suggested that consumers were holding back on spending in the face of trade tensions and a global economic downturn.
The Dow Jones Industrial Average fell 0.1% to 27007. The S&P 500 slipped 0.2%. Nasdaq Composite lost 0.3%. However, global equities faltered as concerns raised over Brexit talks and the prospects of a US-China trade.
Data from the Department of Commerce on Wednesday showed that US retail sales dropped 0.3% in September. Economists polled by The Wall Street Journal expected the data to show a 0.2% revenue increase.
Concerns about economic growth continue to bubble. This week, the International Monetary Fund cut its global GDP forecast for 2019 to just 3%, the lowest level since the 2008 financial crisis, citing trade tensions and geopolitics. It estimated 3.4% growth in 2020.
Even that may be too optimistic, Oxford Economics wrote. "We believe the worst effects of industry and trade weakness have not yet passed," the company wrote in a note.
Despite these concerns, the large US stock indices are still near high times. Investors will look to the company's earnings season for new drivers.
Bank of America shares rose 2.9% as the bank reported gains in consumer, wealth and commercial businesses.
PNC Financial Services Group reported an increase in revenue that beat analysts' forecasts, pushing the shares up 1[ads1].3%. Bank of New York Mellon shares rose 1.1% of revenues, which is stronger than expected.
McKesson,
AmerisourceBergen
and
Cardinal health
gathered after the Wall Street Journal reported that they were in talks to settle the opioid crisis dispute. Shares in McKesson rose 4%, AmerisourceBergen rose 2.1%, and Cardinal Health rose 2.6%.
IBM and Netflix will also report revenue in the third quarter after markets close in the United States
The pan-continental Stoxx Europe 600 index was down 0.1% while talks on a draft plan for the UK to leave The EU continued. Investors had expected positive news to come overnight, but were disappointed by the lack of progress Wednesday, said
Peter Dixon,
senior economist at Commerzbank.
“We were told there was going to be a deadline until midnight yesterday; both sides sounded very positive. Then we woke up, and there was still work in progress, and I think that has changed investors' perceptions of where we are, "he said.
"It looks like there is progress, but there are obstacles to getting something agreed with the EU, and then it will be difficult to get it through parliament," she said.
Christopher Peel,
chief investment officer at Tavistock Investments.
The British pound, which had hit a four-month high against the US dollar a day earlier, was flat, while the FTSE 100 British Equity stock slipped 0.4%.
Photo:
ANDY RAIN / SHUTTERSTOCK
Chinese stocks fell lower because of concerns that tensions with the United States over the Hong Kong protocols would make trading more complicated.
Shanghai Composite Index fell 0.4% after the US House of Representatives passed a series of bills of pro-democracy protesters in Hong Kong, drawing a strong rebuke from China. A spokesman for the Chinese Foreign Ministry warned the United States against interference in Chinese affairs, saying the bill would hurt the relationship between the two nations.
The development could complicate efforts to reach a trade agreement, analysts said.
"We got sidetracked by those headlines from China," he said
Stephen Innes,
a market strategist for currency broker AxiTrader in Bangkok. "I'm not sure much is going to come from it, but that's just one thing to grab."
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