Wall Street slips as lockdown protests spread in China
NEW YORK, Nov 28, (AP): US stocks fell in morning trading on Wall Street Monday as protests spread in China calling for President Xi Jinping to step down amid growing anger over severe COVID-19 restrictions.
The world’s second largest economy has been stifled by a “zero COVID” policy which includes lockdowns that continually threaten the global supply chain at a time when recession fears hang over economies worldwide. The recent upheaval in China is the greatest show of public dissent against the ruling Communist Party in decades.
The S&P 500 fell 0.5% as of 10:18 a.m. Eastern. The Dow Jones Industrial Average fell 134 points, or 0.4%, to 34,213 and the Nasdaq fell 0.5%.
Markets in Asia and Europe slipped. U.S. crude oil prices fell 1.4% and weighed down energy companies. Hess fell 1.7%. Bond yields held relatively steady. The yield on the 10-year Treasury fell to 3.68% from 3.69% on Friday.
Technology companies were the biggest weights on the broader market. Apple, which has seen iPhone production hit hard by lockdowns in China, fell 1.8%.
Several casino operators gained ground as the Chinese gambling haven of Macao tentatively renewed the their licenses. Las Vegas Sands rose 1.4% and Wynn Resorts gained 4.9%.
Wall Street is coming off of a holiday-shortened week that was relatively light on corporate news and economic data. Investors have a busier week ahead as they continue monitoring the hottest inflation in decades and its impact on consumers, business and monetary policy.
Anxiety remains high over the ability of the Federal Reserve to tame inflation by raising interest rates without going too far and causing a recession. The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing.
Federal Reserve Chair Jerome Powell will speak at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday.
The Conference Board will release its consumer confidence index for November on Tuesday. That could shed more light on how consumers have been holding up amid high prices and how they plan on spending through the holiday shopping season and into 2023.
The government will release several reports about the labor market this week that could give Wall Street more insight into one of the strongest sectors of the economy. A report about job openings and labor turnover for October will be released on Wednesday, followed by a weekly unemployment claims report on Thursday. The closely-watched monthly report on the job market will be released on Friday.
Europe
In Europe at midday, Germany’s DAX and the CAC 40 in Paris each lost 0.9%, while Britain’s FTSE 100 gave up 0.4%.
Asia
In Asian trading Monday, Hong Kong’s Hang Seng fell 1.6% to 17,297.94 and the Shanghai Composite index lost 0.8% to 3,078.55.
Shares in telecoms equipment maker ZTE fell 4.2% after U.S. regulators banned sales of its products in the U.S.
The Federal Communications Commission said Friday it was banning the sale of communications equipment made by ZTE and Huawei Technologies and restricting the use of some China-made video surveillance systems, citing an “unacceptable risk” to national security.
Tokyo’s Nikkei 225 index shed 0.4% to 28,162.83 and the Kospi in Seoul lost 1.2% to 2,408.27. In Sydney, the S&P/ASX 200 declined 0.4% to 7,229.10 following the release of weaker than expected retail sales data. Bangkok’s SET was 0.2% lower while the Sensex in Mumbai added 0.3%. There are a number of highly anticipated economic indicators coming out this week. The Conference Board business group will release its report on consumer confidence and the U.S. releases its data on November employment on Friday.
Anxiety is riding high over the ability of the Federal Reserve to tame the hottest inflation in decades by raising interest rates without going too far and causing a recession.
The central bank’s benchmark rate currently stands at 3.75% to 4%, up from close to zero in March. It has warned it may have to ultimately raise rates to previously unanticipated levels to rein in high prices on everything from food to clothing.
Federal Reserve Chair Jerome Powell will speak at the Brookings Institution about the outlook for the U.S. economy and the labor market on Wednesday.
Oil
U.S. benchmark crude oil slid $2.40, falling to $73.88 per barrel on the New York Mercantile Exchange, and has now fallen for three consecutive weeks.
Brent crude, which is used to price oil for international trading, sank $2.60 to $81.11per barrel.
Currencies
The dollar fell to 138.32 Japanese yen from 139.28 yen. The euro rose to $1.0474 from $1.0379.