por admin » Jue May 28, 2020 3:05 pm
Dow falls for the first time in 3 days, drops 100 points on U.S.-China tensions
PUBLISHED WED, MAY 27 20206:05 PM EDTUPDATED MOMENTS AGO
Fred Imbert
@FOIMBERT
Thomas Franck
@TOMWFRANCK
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Stocks closed lower on Thursday, erasing solid gains from earlier in the day, after President Donald Trump said he would be giving a news conference Friday regarding China.
The Dow Jones Industrial Average fell 147 points, or 0.6%. At its session high, the Dow was up 210 points. The S&P 500 slid 0.2%, giving back a jump of 1%. The Nasdaq Composite dropped 0.5%.
Trump’s announcement came after China’s National People’s Congress approved a national security bill for Hong Kong. The bill will bypass Hong Kong’s legislature, raising concerns over the longevity of Hong Kong’s “one party, two systems” principle, which allows additional freedoms mainland China does not have.
“If the HK response involves broad sanctions against individuals or entities, that would be a larger issue and not something the SPX could easily dismiss,” said Adam Crisafulli of Vital Knowledge, in a note. Stock valuations are “too high in general and leaves no room for error while investors aren’t paying enough attention to rising US-China tensions.”
Stocks traded higher for most of the session as the latest unemployment data signaled the worst of the economic damage from the coronavirus pandemic may be over.
The Labor Department said Thursday another 2.1 million Americans filed for unemployment benefits last week. That’s more than a Dow Jones estimate of 2.05 million. To be sure, the pace of new filings has dropped from previous weeks. Continuing claims, which represent a better unemployment picture, plunged by nearly 4 million in their first decline since the coronavirus outbreak.
Chart of U.S. initial unemployment clams through Saturday, May 23, 2020.
Bank of America CEO Brian Moynihan told CNBC’s “Squawk Box” on Thursday that the U.S. economy is coming “out of the hole,” noting: “You’re seeing us come out of the depths of where we were in April, and that’s good news.”
Thursday’s market moves added sharp rallies in the major stock indexes so far this week. The S&P 500, Nasdaq Composite and Dow are all up more than 1% this week. The Dow is on track for its best week since April.
Traders say this week’s rally is in large part thanks to optimism about the reopening of the U.S. economy.
“The greatest stimulus for the economy is a safe reopening,” wrote Gregory Faranello, head of U.S. rates trading at AmeriVet Securities. “In the end, reopening in and of itself will gradually show improvement although the true demand side still remains unclear.”