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Wall Street drops; White House considers delisting Chinese companies

Stock Markets Sep 27, 2019 04:41PM ET
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks fell on Friday after reports that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges, raising worries about a further escalation in the U.S.-China trade war.

The move would be part of a broader effort to limit U.S. investment in Chinese companies, sources told Reuters.

High-level trade talks between Washington and Beijing are scheduled for Oct. 10-11, before the start of the U.S. third-quarter earnings season.

"If our policies spark a major sell-off in Shanghai where that creates problems for China, that could negatively impact the trade negotiations, which are supposed to start on Oct. 10. That is where the U.S.-based fear would come from," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

The tariff-sensitive Philadelphia semiconductor index (SOX) extended its decline after the reports and ended down 2.4% on the day. The index was already under pressure from Micron Technology Inc's (O:MU), which tumbled after it forecast a disappointing first-quarter profit.

The S&P technology index (SPLRCT) dropped 1.3%. U.S.-listed shares of Alibaba Group Holding Ltd (N:BABA), Baidu Inc (O:BIDU) and JD.com Inc (O:JD) all slid.

Adding to the negative momentum in afternoon trade, the S&P 500 index briefly fell below its 50-day moving average.

The Dow Jones Industrial Average (DJI) fell 70.87 points, or 0.26%, to 26,820.25, the S&P 500 (SPX) lost 15.83 points, or 0.53%, to 2,961.79 and the Nasdaq Composite (IXIC) dropped 91.03 points, or 1.13%, to 7,939.63.

All three indexes ended lower for the week as well, with the S&P 500 and Nasdaq registering their biggest weekly percentage drops since August. The Cboe volatility index (VIX) ended at a three-week high.

Shares of Wells Fargo & Co (N:WFC) rose 3.8% and the stock was the top gainer in the S&P 500 after the lender named banking veteran Charles Scharf as chief executive officer.

Data early in the day showed U.S. consumer spending barely rose in August, suggesting that the economy's main growth engine was slowing after accelerating sharply in the second quarter.

Declining issues outnumbered advancing ones on the NYSE by a 1.38-to-1 ratio; on Nasdaq, a 1.94-to-1 ratio favored decliners.

The S&P 500 posted 11 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 29 new highs and 118 new lows.

Volume on U.S. exchanges was 6.68 billion shares, compared to the 7.2 billion average for the full session over the last 20 trading days.

Wall Street drops; White House considers delisting Chinese companies
 

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Comments (13)
Ben Ng
Ben Ng Sep 27, 2019 9:16PM ET
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Why not redeem all US1.1 trillion treasury bond from China? To be fair right?
Ravi Shastri
Ravi Shastri Sep 27, 2019 8:49PM ET
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They should not have listed companies that do not follow US financial disclosures in the first place. Containg the genie back is going to be difficult but needs to be done. Else US will experience the Sub prime phenomenon out of china. Lagarde is a chinese puppet who got into IMF using their support. Soon MSCI will have companies whose financial disclosures are not at par with US stdandards. Index based US investing is at risk. European pension is leas exposed to this. Time to bell the cat.
alex ioffe
alex ioffe Sep 27, 2019 2:32PM ET
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very good move. It will bring more money to the US. But it takes a lot of time to execute an idea properly.
Tumelo Mash
Tumelo Mash Sep 27, 2019 1:32PM ET
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You know what's funny Trump hasn't tweeted a single word.. His afraid of how the market might react... His in *****and he knows it... He Tweets every 30 mins nowadays... Saying... It's not me its not me what about her and I deserve some respect we wouldn't be in a economic cycle like this one if it ain't for me
Rob Omes
Rob Omes Sep 27, 2019 1:17PM ET
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Trump and his friends are loading there pockets before he is finished as president. The biggest corrupt president ever seen. Get rid of the man... (message from The Netherlands)
Rob Omes
Rob Omes Sep 27, 2019 1:13PM ET
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I think Trump and his friends are loading pockets before he is president off
Erski Gumby
SB20 Sep 27, 2019 12:18PM ET
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Did anyone else here made a ton of money from Micron overnight?
David David
David9 Sep 27, 2019 12:18PM ET
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I did...
gm mit
gm mit Sep 27, 2019 10:55AM ET
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The phony 'impeachment investigation' has been going on for 3 years. No news here.
Ilham Ilham
Ilham Ilham Sep 27, 2019 10:45AM ET
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hmm
Peter Dikeakos
Peter Dikeakos Sep 27, 2019 9:36AM ET
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Don't believe me, but.... Move to inverse ETFs and hold them for life. You will be as rich as Buffett WAS. Remember me in 50 years. ...no joke!
john hincapie
john hincapie Sep 27, 2019 9:36AM ET
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Hi Peter can you explain me a bit of inverse ETFs ? im newbie.
john hincapie
john hincapie Sep 27, 2019 9:36AM ET
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Thanks
Peter Dikeakos
Peter Dikeakos Sep 27, 2019 9:36AM ET
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If you don't believe or have witnessed market can go down 30+%....no use. I am talking about a Life time. The odds are slim but more exciting.
Loan Pham
Loan Pham Sep 27, 2019 9:36AM ET
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john hincapie short etf like sds
 
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