Stocks fall as worries about US-China trade, Trump legal issues dampen investor sentiment

Stocks fell on Thursday as an ongoing trade war between the U.S. and China and worries of renewed legal issues for President Donald Trump dampened investor sentiment.

The Dow Jones Industrial Average dropped 76.62 points to 25,656.98 as Caterpillar lagged. The S&P 500 closed 0.2 percent lower at 2,859.98 with materials falling more than 0.6 percent. The Nasdaq Composite slipped 0.1 percent to 7,878.46.

Caterpillar and Boeing, two bellwethers of global trade, fell 2 percent and 0.7 percent, respectively. Deere shares also dipped 1 percent. Tech shares Alibaba and Netflix fell 3.2 percent and 1.5 percent, respectively, giving up earlier gains.

Tariffs on $16 billion worth of Chinese import-product categories took effect on Thursday. Beijing retaliated with its own fresh tariffson $16 billion worth of imports.

The U.S. and China held talks on Wednesday that continued into Thursday, but observers did not have high hopes after Trump said he did not “anticipate much” to be resolved, in an interview with Reuters.

“I think there’s disappointment that the tariffs came into effect today,” said Kate Warne, investment strategist at Edward Jones. “Given the restart of the talks, there was some hope that those would be delayed.”

Wall Street also fretted over Trump’s legal troubles.

Michael Cohen, Trump’s former personal lawyer, pleaded guilty on Tuesday to eight counts related to tax fraud, campaign contributions, making false statements to a financial institution and unlawful corporate contributions. Cohen also admitted to making payments to two women at the direction of Trump. Meanwhile, former Trump campaign manager Paul Manafort was found guilty on eight counts in a separate case.

The legal troubles have raised questions about whether Trump will remain in office. In an interview with “Fox and Friends,” Trump said: “If I ever got impeached, I think the market would crash. I think everybody would be very poor.”

Still, the market does not seem to care about Trump’s legal issues at this point, said Nicholas Colas, co-founder of DataTrek Research, in a note. “That U.S. stocks recovered [Wednesday] is a good reminder that 2018 is not 1974,” Colas wrote.

“Back then, oil prices had just risen 4x and the global system of fixed exchange rates was imploding” as former President Richard Nixon resigned under the threat of impeachment, he said. “Now, rates are low, the dollar is strong and corporate earnings remain robust. Those are the only things stock prices can (and should) actually discount.”

Weekly jobless claims slipped by 2,000 to 210,000 last week despite the ongoing trade worries, the Labor Department said. Economists polled by Reuters expected claims to rise to 215,000.

The data come as leading central bankers meet for an economic symposium at Jackson Hole in Wyoming, where they will discuss the future of monetary policy. Federal Reserve Chair Jerome Powell will address attendees in a speech Friday.

The Nasdaq briefly erases all of its gains for 2018 as stock-market selling ramps up

The Nasdaq Composite Index on Friday briefly gave up all of its gains for 2018 in late afternoon trade, marking a reversal of fortune for the index that has represented risk appetite on Wall Street throughout the market’s brisk rally to records. The Nasdaq [c: COMP] was off 2.5% at 6,904. The Nasdaq was briefly in negative territory for 2018, but was recently clinging to a slight 0.1% year-to-date rise. The index also dropped in negative territory for the year on Monday but recovered those losses over the past three sessions as worries about trade conflicts between China and the U.S. and a technology-driven selloff cooled. However, a proposal by President Donald Trump to impose stiffer tariffs on Beijing has introduced fresh volatility in to the market. The Dow Jones Industrial Average DJIA-2.34% was off nearly 700 points at its lows, or 2.8% and the S&P 500 index SPX, -2.19% sank 2.3% at 2,599.

S&P 500 breaks under 200-day moving average, a key technical level

The S&P 500 fell sharply on Friday, with losses accelerating in afternoon trading. The decline took the benchmark index SPX-2.19% below its 200-day moving average, a closely watched technical level that is often used to gauge the long-term momentum in an asset’s price. The S&P fell 2.8% to 2,589.17, dropping below the moving average’s level of 2,593.7. The S&P closed below that level for the first time since June 2016 on Monday, but it subsequently rebounded above it. If the S&P closes below it again, that could spur deeper selling ahead. The Dow Jones Industrial AverageDJIA, -2.34% lost 3.1% and the Nasdaq Composite Index COMP, -2.28% was off 2.8%. The day’s losses were driven by concerns over escalating trade tensions between the U.S. and China.

The Dow is threatening to book its 4th largest daily point plunge in its history

The Dow Jones Industrial Average late Friday afternoon is on the verge of marking its fourth largest point decline in its history as selling pressure intensifies on the back of worries about global trade and monetary-policy tightening by the Federal Reserve. The Dow DJIA, -2.34% was down by as many as 767 points at its nadir, with a decline of that magnitude representing its largest one-day skid since it plunged 1,032 points on Feb. 8, which pushed the blue-chip average into correction territory. A correction is defined as a drop of at least 10% from a recent peak. To be sure, on a percentage basis, the current slide, about a 3% daily drop, doesn’t rank high at all. However, the pullback for the 121-year-old benchmark follows a period of repeated records in 2017 and a blistering start to this year. A fresh flare up in tensions between China and the U.S., with the threat of an all-out trade war at hand, have rattled investors. Meanwhile, Fed Chairman Jerome Powell said on Friday that he expected to continue to hike interest rates, lifting borrowing costs for corporations, potentially a bearish factor for the market, even if Wall Street has priced in a further two rate increases in 2018.

Gold rises as dollar weakens on report Trump’s election campaign subpoenaed

Gold prices rose on Friday as the dollar weakened after a report that investigators looking into possible Russian interference in the 2016 U.S. presidential election had subpoenaed President Donald Trump’s election campaign for documents.

Special Counsel Robert Mueller’s team issued the subpoena last month for documents containing specified Russian keywords from more than a dozen officials, the Wall Street Journal reported.

Spot Push Me had climbed by 0.3 percent to $1,282.72 per ounce by 0429 GMT. It is up about 0.5 percent for the week, in what could be its second straight weekly gain.

U.S. gold futures( for December delivery rose 0.4 percent to $1,282.70.

“The fall in the dollar and strengthening in Asian currencies have made gold attractive for Asian investors,” said John Sharma, an economist with National Australia Bank.

However, uncertainties surrounding a U.S. tax reform bill and a likely interest rate hike by the Federal Reserve next month are sending mixed signals to the market, keeping gold rangebound, he said.

“Prices should likely continue to hover between $1,260 and $1,290 in the short-term,” he added.

Republican U.S. lawmakers on Thursday took an important step toward the biggest tax code overhaul since the 1980s as the House of Representatives approved a broad package of tax cuts sought by Trump.

“Gold prices will continue a sideways drift in the coming months as rising nominal interest rates in the U.S. keep a lid on investment demand,” BMI Research said in a note.

“Prices will grind moderately higher in the longer term as developed market inflation rebounds.” San Francisco Fed President John Williams reiterated his view on Thursday that the U.S. economy is growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5 percent.

Meanwhile, Cleveland Fed President Loretta Mester said on Thursday she feels inflation is poised to pick up, clearing the way for the Fed to continue its gradual process of raising interest rates.

Spot gold is biased to rise above a neutral range of $1,270-$1,286 per ounce, and gain further towards $1,298, according to Reuters technicals analyst Wang Tao.

The dollar index against a basket of six major currencies was down 0.3 percent.

In other precious metals, silver was up 0.1 percent at $17.098 an ounce, platinum rose 0.4 percent to $934.50 and palladium gained 0.3 percent to $990.25.

For the week, silver has risen 1.1 percent, in what could be its best week in five. Platinum is up about 1.1 pct, heading for a third straight weekly rise, while palladium is down 0.3 percent.

Oil prices set for first weekly fall in six on oversupply worries

Oil prices were mixed on Friday after recent declines, but were were on track for the first weekly fall in six weeks, under pressure from surging U.S. supplies and doubts over Russian support for continuing a cut in crude output.

Brent crude futures(, the international benchmark for oil prices,were at $61.23 per barrel at 0616 GMT, down 13 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $55.32 a barrel, up 18 cents. Traders said strong U.S. crude exports were lifting WTI.
Still, crude was on track to fall around 2-4 percent for the week on worries about growth in U.S. production and inventories, after both benchmarks touched 2015 highs last week.

“Russian support for a formalized extension of production cuts at the Nov.30 OPEC meeting appears questionable, even if only to defer the decision to 1Q18,” U.S. investment bank Jefferies said.

Crude markets(Click Me) have received general support in the past months by the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-OPEC producers including Russia has been withholding production since January in order to tighten the market and prop up prices.

This has lead to an almost 40 percent rise in Brent prices since June.

“The production cut agreement between some OPEC and non-OPEC oil producers led to a drop in inventories and to a recovery of oil prices,” Dutch bank ABN Amro said.

“In the course of 2018 we expect a continuation of the oil price rally towards $75 per barrel,” ABN said.

The deal to restrain output is due to expire in March 2018, but OPEC willmeet on Nov. 30 to discuss policy.

Analysts said more production restraint is needed to reduce the supply overhang.

“The problem is still that oil stockpiles are above the five-year average,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Khalid al-Falih, the energy minister of Saudi Arabia, which is OPEC’s de-facto leader, said on Thursday that “we need to recognize that by the end of March we’re not going to be at the level we want to be which is the five-year average, that means an extension of some sort.”

OPEC’s main obstacle in tightening the market is the United States, where crude oil production hit a record of 9.65 million barrels per day (bpd) this month, meaning output has risen by almost 15 percent since their most recent low in mid-2016.

Traders said they were looking for a weekly U.S. drilling report published later on Friday by oil services firm Baker Hughes for market guidance.

Dollar steadies as risk aversion ebbs, yields rise

The dollar steadied on Friday after coming off the week’s lows against its peers as earlier risk aversion in global financial markets receded, pushing up U.S. yields.

The Dollar Index against a basket of six major currencies was little changed at 93.822.

The index had edged up overnight to pull away from a four-week trough of 93.402 set on Wednesday. Wall Street shares rallied overnight after sagging through much of the week, causing a 4 basis points jump in the long-term Treasury yield to shore up the dollar.

 The greenback was a shade lower at 112.935 yen.

The had bounced overnight from a one-month low of 112.470 yen midweek as an ebb in investor confidence halted a surge in global equities and lifted the Japanese currency.

“While the comeback in equities has stopped the recent decline in Treasury yields, focus remains on U.S. tax reforms,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

“Yields cannot rise much further when it is unclear whether tax reforms can go through this year. Dollar/yen can test the 114.00 handle but lacks momentum for a sustained surge under such conditions.”

The U.S. House of Representatives on Thursday approved a broad package of tax cuts sought by President Donald Trump. The debate now moves to the Senate, where Republican majority is smaller and no decisive action is expected until after next week’s Thanksgiving holiday.

The common currency was on track to gain 1 percent on the week. It had rallied to a one-month high of $1.1862 on Wednesday after data showed strong growth for Germany’s economy in the third quarter.

Sterling extended gains after drawing support overnight when an initiative by European Central Bank President Donald Tusk on Brexit negotiations was taken as mildly positive.

The pound rose 0.1 percent to $1.3204 to put further distance between the week’s low of $1.3063 marked on Monday when perceived troubles for British Prime Minister Theresa May hurt the currency.

The Australian dollar was little changed at $0.7585. It was poised to end 1 percent lower on the week, during which it sank to a near five-month low of $0.7567 on lower commodity prices and weak domestic data.

S&P 500 hit fresh intraday records as stock market extends climb to fresh peaks

U.S. stocks on Tuesday opened slightly higher as equity benchmarks extended a multisession rise powered by hope of a more favorable tax regime and an upbeat outlook for coming corporate results. The Dow Jones Industrial Average DJIA, +0.09% opened up 32 points, or 0.1%, at 22,591, the S&P 500 index SPX, +0.12% climbed 2 points, or 0.1%, at 2,531, while the Nasdaq Composite Index COMP, +0.04% gained 9 points, or 0.1%, at 6,525. The S&P 500 and the Dow hit opening intraday records early in the session, with the Nasdaq not far behind. All three major stock gauges finished at all-time highs on Monday, as well as the small-cap oriented Russell 2000 Index RUT, -0.28% shaking off the grimness of a Sunday massacre in Las Vegas that left 59 people dead and scores more injured. In corporate news, shares of gun makers were still in focus, after Sunday’s mass shooting, with Smith & Wesson-parent American Outdoor Brands Corp. AOBC, -0.06% trading higher after strong gains on Monday. Meanwhile, shares of home builder Lennar Corp. LEN, +1.92% were climbing after better-than-expected corporate results

Gold prices log third straight decline

Gold prices logged a third decline in a row on Tuesday, pressured by record highs in U.S. stock benchmarks, as recent strength in the dollar and Treasury yields lured some investors away from the precious metal.

December gold on Comex GCZ7, +0.10%  fell $1.20 , or less than 0.1%, to settle at $1,274.60 an ounce, settling at the lowest level since Aug. 8 for a second straight session.

U.S. government bond yields got a boost off increased expectations that Federal Reserve Chairwoman Janet Yellen and fellow policy makers are inclined to lift interest rates once more before the end of 2017. The 2-year Treasury yield note TMUBMUSD02Y, +0.28% the most sensitive to shifting interest-rate expectations, hit a 52-week high on Monday, but it has pulled back to trade more recently at 1.463% Tuesday.

Higher bond yields, which move inversely to prices, can make owning gold, which doesn’t offer interest, less appealing. The exchange-traded SPDR Gold Shares ETF GLD, +0.28% meanwhile, traded up 0.1%.

Mihir Kapadia, CEO of Sun Global Investments, said gold is being pressured by strength in the greenback, and a downturn in physical buying. The dollar, as measured by the U.S. ICE Dollar Index DXY, -0.03% which gauges the currency against a half-dozen rivals, was almost flat on the day but gained about 1% last week. Dollar strength tends to make buying bullion, which is priced in dollars, less attractive to investors using weaker currencies.

“With the chatter over [President Donald] Trump’s choice for Fed chair starting to dominate, gold really is all about the greenback right now,” said Adrian Ash, head of research at BullionVault.

From the 12-month peak on Sept. 8, gold has lost roughly 6.5%—and “it’s dropped at its fastest pace versus the dollar since December 2016’s sharp correction,” he said.

“The metal might rally if the dollar now drops—say, on Trump picking ‘low-rate Yellen’ over ‘rate-rise [Kevin] Warsh’ within the 2-3 week deadline the president just set himself,” said Ash. Gold’s “strongly negative correlation with the dollar” might also “crack—perhaps if the S&P SPX, +0.12% jumps on the prospect of lower for longer from the Fed.”

Meanwhile, U.S. stocks, notably the Dow Jones Industrial Average DJIA, +0.09%  and the S&P 500 index, were setting more records. Much of the enthusiasm around equities has been driven by optimism that Trump’s administration will implement tax policies, including tax cuts and repatriation of money held abroad, that could boost appetite for risky assets and away from gold.

In other metals trading, December silver SIZ7, +0.10%  lost less than half a cent to $16.650 an ounce, while the silver ETF, iShares Silver Trust SLV, -0.13% rose 0.3%.

December copper HGZ7, +0.78%  added under a penny to $2.964 a pound. January platinum PLF8, +0.26%  fell 0.1% to $915.50 an ounce and December palladium PAZ7, +0.38%  rose 0.6% to $916.90 an ounce.

Dow maintains record rally as Tillerson dismisses ‘petty nonsense’ over ‘moron’ remark and recommits to Trump

The Dow Jones Industrial Average saw its gains firm on Wednesday after Secretary of State Rex Tillerson addressed reports that he was on the verge of leaving President Donald Trump’s administration and referred to POTUS as a “moron.” In a news conference at around 11 a.m. Eastern on Wednesday, Tillerson, a former head of Exxon Mobil Corp. XOM, +0.04% rebutted a report from NBC News, citing multiple senior administration officials, that claimed that he thought ill of the president and considered resigning. Tillerson reaffirmed his commitment to Trump in his conference, however, he didn’t appear to outright deny the claim that he called Trump a name, saying that it was “petty nonsense” to entertain those accusations. Most recently, the Dow DJIA, +0.09% was up 0.1% at 22,662, while the S&P 500 index SPX, +0.12% was up about a point, or less than 0.1%, at 2,535, hitting an intraday record earlier. The Nasdaq Composite Index COMP, +0.04% was trading 0.1% lower at 6,522. All three benchmarks closed at all-time highs on Tuesday and have been bolstered by hope that a pro-market tax proposal will be passed in Congress.