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Wall Street pushed down by weak data, trade worries

Stock MarketsSep 03, 2019 04:23PM ET
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© Reuters. The Dow Jones Industrial Average is displayed on the trading floor at the New York Stock Exchange (NYSE) in New York City

By Sinéad Carew

NEW YORK (Reuters) - U.S. stocks fell on Tuesday as investors worried about global growth prospects after data showed U.S. factory activity shrank in August for the first time since 2016 and the United States and China imposed new tariffs on each other over the weekend.

Investors fled riskier assets as the latest round of tariffs and the lack of a date for a resumption of U.S.-China talks gnawed at any hopes for a resolution to the long-running trade war, which has rattled markets for months and weighed on world economies.

Compounding the uncertainty, the Institute for Supply Management said early in the day that its index of national factory activity dropped to 49.1, compared with a reading of 51.1 estimated by analysts polled by Reuters.

"If anything the U.S. manufacturing data signals that the new tariffs couldn't come at a worse time. It's bad news on top of bad news. That's why investors are so focused on negotiations" said Alec Young, managing director of global markets research at FTSE Russell based in New York.

"Not only have expectations been receding for a U.S.-China deal but they can't even agree on a date to meet," said Young.

He also cited growing uncertainty around Brexit as a concern for investors. British lawmakers on Tuesday triggered a vote that could allow them to stop Boris Johnson pursuing a "no-deal" Brexit, a challenge that the government warned would prompt the prime minister to seek an election on Oct. 14.

Earlier in the day data showed British construction companies last month suffered the sharpest drop in new orders since the financial crisis amid Brexit jitters.

The Dow Jones Industrial Average (DJI) fell 285.26 points, or 1.08%, to 26,118.02, the S&P 500 (SPX) lost 20.19 points, or 0.69%, to 2,906.27 and the Nasdaq Composite (IXIC) dropped 88.72 points, or 1.11%, to 7,874.16.

Trade-sensitive industrials (SPLRCI) fell 1.4%, making for the biggest percentage loser among the S&P 11 major sectors. Technology stocks (SPLRCT) fell 1.3%, weighed down by chipmakers, which have a large revenue exposure to China. The Philadelphia Semiconductor index (SOX) dropped 1.8%.

Boeing Co shares (N:BA), tumbled 2.7% providing the biggest drag for the Dow, after the Federal Aviation Administration said on Friday a global panel of experts will need a few more weeks to finish its review of the company's 737 MAX certification.

U.S. casino operators felt the brunt of slowing economic growth in China as gambling hub Macau posted weak August casino revenue. Shares of Las Vegas Sands Corp (N:LVS), Wynn Resorts Ltd (O:WYNN) and MGM Resorts International (N:MGM) fell between 2% and almost 4%.

The only sectors that gained ground were utilities (SPLRCU), rising 1.8%, real estate <.SPLRCR>, climbing 1.3% and consumer staples (SPLRCS), which closed the session up 0.5%.

Declining issues outnumbered advancing ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 2.50-to-1 ratio favored decliners.

The S&P 500 posted 43 new 52-week highs and 10 new lows; the Nasdaq Composite recorded 49 new highs and 134 new lows.

On U.S. exchanges 6.72 billion shares changed hands compared with the 6.99 billion average for the last 20 sessions.

Wall Street pushed down by weak data, trade worries
 

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Comments (9)
David David
David9 Sep 03, 2019 3:02PM ET
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Trump will go down in history as the president who puts worldwide econonies into a dark recession.
Papai Mil
Papai Mil Sep 03, 2019 2:44PM ET
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Adolph ******did not accept his loss even when the Russians were entering Berlin in 1945. Trump policy reminds me of such stubbornness. In the end this great country will end up either becoming a dying economy or it will become a country of fanatic dictators and end up having the whole world against US. Finding enemies like the Chinese won't help this time. It is better for this great nation to start evolving in an environment of two or three big economic powers and adjust its policy without trying to find new witches to burn.
Hank Williams
Hank Williams Sep 03, 2019 2:21PM ET
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Normally with the information like today the market would be down three times as much.
Juan Treviño
Juan Treviño Sep 03, 2019 2:05PM ET
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It seems that the trump dictator is not doing well.
Zack Persie
Zack Persie Sep 03, 2019 1:34PM ET
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Thanks to Trump, instead of getting the manufacturing jobs back to US, US factories are now contracting! So much "winning"!
Brad Dover
Brad Dover Sep 03, 2019 12:08PM ET
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Record HIgh deficits and s shrinking economy. . . where did ALL THOSE TRILLIONS GO. . . I feel *******and cheated
Peter Dikeakos
Peter Dikeakos Sep 03, 2019 11:53AM ET
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TRADING RANGE.....FOR NOW. Easy to see even for amateurs.
Ng Zen ng
Ng Zen ng Sep 03, 2019 11:01AM ET
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Agreed. Is a good market moderation started 2 yrs ago till now. Well controlled and now getting better. Instead of sudden death of market burst! Best actors hollwood awards for both. Cheers
Tom OKray
Tom OKray Sep 03, 2019 10:55AM ET
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Markets shouldn't react anymore as the trade tension have gone on for two years, it has now become the norm, just like low interest rates and Trump tweets.
 
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