Wall St falls as Trump greenlights China tariffs, financial stocks up

Asian markets build on trade talks rally, Turkish lira holds up

NEW YORK, Sept 15, (Agencies): US stocks fell back on Friday after President Trump instructed aides to proceed with tariffs on about $200 billion in Chinese products, despite Treasury Secretary Steven Mnuchin’s attempts to restart talks with Beijing.

A source familiar with the situation confirmed stories initially carried by both Bloomberg and Fox News on the moves by the White House.

Wall Street, which had been trading marginally in positive territory on the back of a rise in US Treasury yields above 3 percent, reversed.

“If Trump is willing to go ahead with the tariffs then that is significant enough to sour markets,” said Bryan Reilly managing director at CIBC Private Wealth Management in Boston, Massachusetts.

“Should this trade uncertainty prevail, then sentiment only has one way to go from here and that is down.”

At 12:39 a.m. ET the Dow Jones Industrial Average fell 0.17 percent to 26,102.37, the S&P 500 0.15 percent to 2,899.71 and the Nasdaq Composite 0.26 percent to 7,992.72.

Financial stocks held on to their gains and were last up 0.52 percent. Only three of the 11 major S&P sectors were higher.

The real estate index fell 1.11 percent, while utilities 0.69 percent and telecoms declined 0.77 percent.

Also weighing on utilities was NiSource, which tumbled 9.9 percent after fire investigators said they suspected the company’s unit, Columbia Gas, was linked to a series of gas explosions in Boston suburbs on Thursday.

The energy sector was up 0.69 percent, making it the best performing group on the day.

Walmart dropped 0.5 percent after Goldman Sachs raised questions around the purchase of a majority stake in India’s Flipkart.

L Brands Inc jumped 4.8 percent after the owner of Victoria’s Secret said it would close all 23 Henri Bendel stores and its website in January.

Adobe Systems rose 2.6 percent after the company topped quarterly revenue and profit expectations.

Declining issues outnumbered advancers for a 1.18-to-1 ratio on the NYSE, but advancing issues outnumbered decliners by a 1.19-to-1 ratio on the Nasdaq.

The S&P index recorded 45 new 52-week highs and no new lows, while the Nasdaq recorded 100 new highs and 48 new lows.

Gains among tech, auto and mining stocks pushed European shares higher on Friday, as hopes of new trade talks between the United States and China boosted investor sentiment.

The pan-European STOXX 600 ended up 0.4 percent, scoring its strongest weekly gains in seven weeks.

Analysts and traders saw new trade talks as a positive for the market, with some expecting US President Donald Trump to seek to seal a trade deal before mid-term elections in November, but they pointed to lingering nerves in the market.

However, after European markets closed, shares in the United States turned lower after a Bloomberg report said Trump had asked aides to proceed with tariffs on $200 billion more in Chinese imports.

Topping the STOXX was bank and asset manager Investec which jumped 8.4 percent after saying it would demerge and separately list its asset management arm.

Casino, whose stock price has been hit by concerns over its debts and that of parent Rallye, bounced 6.8 percent after a reassuring note from brokerage firm Kepler-Cheuvreux.

Autos rose 1.4 percent, leading sectoral gainers and building on the previous session’s rise.

Miners rose 1 percent and tech gained 0.7 percent.

Among tech stocks, STMicro rose 1.9 percent after Bank of America Merrill Lynch upgraded the stock to “neutral”.

UK housebuilders Taylor Wimpey and Barratt Development fell sharply after Bank of England governor Mark Carney was reported in the Times as having told ministers that a no-deal Brexit could cause house prices to fall by 35 percent over three years.

Scenarios

Their stocks recovered ground to end slightly up after Carney clarified that the bank’s “stress test” scenarios in which house prices fell sharply did not amount to a prediction from the BoE.

Elsewhere, Danske Bank fell 1 percent after the Wall Street Journal reported that U.S. law enforcement agencies are investigating the bank over allegations of money laundering through Estonia. The bank declined to comment.

Investors have been shunning European stocks in favour of US stocks this year, lured by significantly stronger earnings growth there.

Overall the market is currently short European equities, according to Bank of America Merrill Lynch.

Shanghai dipped 0.2 percent, though, while Manila fell 0.7 percent with investors fretting as Super Typhoon Mangkhut barrels towards the northern Philippines.

Key figures around 0810 GMT Tokyo – Nikkei 225: UP 1.2 percent at 23,094.67 (close)

Hong Kong – Hang Seng: UP 1.0 percent at 27,286.41 (close)

Shanghai – Composite: DOWN 0.2 percent at 2,681.64 (close)

Dollar/yen: DOWN at 111.83 yen from 111.94 yen

Oil – West Texas Intermediate: UP 16 cents at $68.75 per barrel

Oil – Brent Crude: DOWN two cents at $78.16 per barrel.