US stocks slump amid geopolitical uncertainty
Global banks set for biggest job cull since 2015
Wall Street stocks lost more ground, closing lower again on Tuesday amid volatility over escalating tensions between Washington and Tehran after the US killing of Qasem Soleimani.
Stocks have been choppy since the killing, slumping on Friday and early Monday before pushing into positive territory late in the session. But they retreated on Tuesday despite a mid-morning upswing.
The Dow Jones Industrial Average lost 0.4 percent to close the session at 28,583.68.
The broad-based S&P 500 shed 0.3 percent to finish at 3,237.18 but the tech-rich Nasdaq Composite Index dipped only a fraction to 9,068.58.
Analysts have said market declines following geopolitical tensions usually do not persist once the initial shock wears off.
But investors remain on alert after a mass funeral procession in Iran for Soleimani led to a stampede that left some 40 people dead and many injured as Iranian lawmakers voted to designate all US forces around the world "terrorists" over Soleimani´s killing.
There was some good economic news to support markets, as the Commerce Department reported that the US trade deficit hit its lowest level in three years in November due to a drop in imports of crude oil, computers and industrial supplies.
And the Institute for Supply Management´s services index rose 1.1 point to 55 percent in December, putting the largest segment of the US economy solidly in growth territory.
"On the one hand, we still don´t know what to make of what´s coming out of Iran. On the other, the economic data is just too good to ignore," analyst Chris Low of FHN Financial said.
And he said a continued shrinking of the US trade gap could boost growth well above expectations.
"Couple that with low inflation and that´s a recipe for decent wage growth, decent earnings growth. It´s a pretty nice environment."
On that note, investors will be looking ahead to Wednesday´s release of ADP private payroll figures for an early hint about the key official jobs report due out Friday.
Among individual companies, Goldman Sachs added 0.7 percent as it disclosed additional details about its financial structure ahead of an investor day later this month.
The prestigious bank is focused on boosting its valuation after a lengthy period of sideways trading.
Banks around the world are unveiling the biggest round of job cuts in four years as they slash costs to weather a slowing economy and adapt to digital technology. This year, more than 50 lenders have announced plans to cut a combined 77,780 jobs, the most since 91,448 in 2015, according to filings by the companies and labour unions.
Banks in Europe, which face the added burden of negative interest rates for years to come, account for almost 82 per cent of the total. The 2019 cuts bring the total for the last six years to more than 425,000. In fact, the actual number is probably higher because many banks eliminate staff without disclosing their plans.
Morgan Stanley is the latest firm to make a year-end efficiency push, cutting about 1,500 jobs, according to people familiar with the matter. Chief executive James Gorman has said the cuts account for about 2 per cent of the bank’s workforce. This year’s figures also underscore the weakness of European banks as the region’s export-oriented economy confronts international trade disputes.