Wall St closes down amid more trade war jitters, high volatility

Italy leads European shares lower on political uncertainty

NEW YORK, Aug 10, (RTRS): US stocks fell on Friday following renewed jitters over the US-China trade war, capping a week of trading that saw big swings and high volume.

President Donald Trump said the United States and China were pursuing trade talks but he was not ready to make a deal, fanning fears over the impact of the trade war on the global economy.

Trump also said the United States would continue to refrain from doing business with Chinese telecoms equipment giant Huawei Technologies.

The week was marked by wild swings, but indexes finished nearly flat on the week. This week’s volume on US exchanges was also the biggest weekly total of the year, exceeding 41 billion shares.

On Friday, all three indexes were down more than 1% in early trading and rebounded later in the session, with the Dow briefly turning positive at one point. This left a 315-point swing between the blue-chip index’s high and low of the day.

The frequent comments on trade are “leaving investors whipsawed,” said Rick Meckler, partner, Cherry Lane Investments, a family investment office in New Vernon, New Jersey.

Shares of chipmakers and other tariffsensitive technology companies fell, with the Philadelphia SE Semiconductor index down 1.8%.

The Dow Jones Industrial Average fell 90.75 points, or 0.34%, to 26,287.44, the S&P 500 lost 19.44 points, or 0.66%, to 2,918.65 and the Nasdaq Composite dropped 80.02 points, or 1%, to 7,959.14.

Shares of Amgen jumped 5.9% after news that a US judge said patents relating to the Amgen’s blockbuster rheumatoid arthritis drug Enbrel were valid, denying a challenge by Novartis AG.

Uber Technologies Inc shed 6.8% after the ride-hailing company reported a record $5.2 billion quarterly loss and revenue that fell short of Wall Street targets.

Nektar Therapeutics shares also plunged, a day after the drug developer flagged manufacturing issues with its experimental cancer drug bempeg.

Declining issues outnumbered advancing ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 2.07-to-1 ratio favored decliners.

The S&P 500 posted 46 new 52-week highs and nine new lows; the Nasdaq Composite recorded 56 new highs and 129 new lows.

UK

London’s FTSE 100 slipped on Friday as a mix of worries over the US-China trade dispute and political turmoil in Italy weighed on heavyweight banks and miners, while the mid-cap index fell after a surprise downturn in Britain’s economy last quarter.

The FTSE 100 gave up 0.4% to end its worst week in three months with a 2% drop. The domestically-focused FTSE 250 handed back earlier gains to end

0.2% lower.

Miners were hit as President Donald Trump said he was not ready to make a trade deal with China, the world’s largest metals consumer. Financial stocks dropped after Italy’s ruling coalition collapsed and League party leader Matteo Salvini called for early elections.

However, losses were capped by a 7.5% surge in ad firm WPP after betterthan-expected organic sales performance in the second quarter.

After posting gains in June and July, the FTSE 100 is on course for its biggest monthly fall since October, as headlines around escalating tensions between Washington and Beijing dominate news.

A 6% post-earnings jump in gambling firm William Hill and drugmaker Hikma was not enough to support midcaps, which dipped as Britain’s economy shrank for the first time since 2012 in the second quarter.

On The Beach slumped more than 14%, its worst day in more than a year, after the online travel agent warned annual performance would miss its own forecasts.

AIM-listed Burford Capital, whose shares tanked 46% earlier this week after short-seller Muddy Waters criticised its accounts and took a short position in the fund, jumped almost 12% after its directors bought shares in the company.

Europe

European shares slid on Friday with Italian stocks 2.5% lower on political uncertainty, while comments by US President Donald Trump that he was not going to make a trade deal with China also weighed on sentiment.

Italy’s main index touched a two month low with its bank index tumbling 4.5% after the leader of the ruling League party, Matteo Salvini, pulled his support for the country’s governing coalition on Thursday and called for fresh elections.

Italy’s budget crisis and prospect of ultra low interest rates for longer have already damaged bank stocks’ valuations and the fresh political concerns sent the bank index to its lowest since September 2016.

Italian 10-year government bond yields were set for their biggest weekly rise this year.

Along with drops of more than 1% in most other major indexes, including trade-sensitive German stocks, the panEuropean STOXX 600 index gave up 0.8%, in line with a move lower in world stocks.

Trump’s remarks on a trade deal with China followed a report that said Washington was delaying a decision to allow some trade between US firms and China’s telecom equipment maker Huawei again.

This added to worries about an escalation in trade tensions between the world’s two biggest economies, which has seen the STOXX 600 give up 1.7% over the week as investors worry over a prolonged impact on global economic growth.

Sectors most exposed to China and trade issues, such as technology, basic materials and automakers , led losses in Europe along with banks.

However, losses on London’s FTSE were limited by a rally in healthcare stocks and a 7.2% surge in advertising company WPP after it reported improved second-quarter trading.

The rise in the healthcare index came after strong results from Hikma Pharma and Carl Zeiss and was also helped by a 2.6% rise in Bayer.

Asia

Asian shares were mixed Friday as investors bought back stocks following gains on Wall Street, although worries about a trade dispute between the US and China remained.

Japan’s benchmark Nikkei 225 added 0.4% to finish at 20,684.82. Australia’s S&P/ASX 200 gained 0.3% to 6,584.80. South Korea’s Kospi added 1.1% to 1,941.95. Hong Kong’s Hang Seng slipped 0.2% to 26,073.32, while the Shanghai Composite edged down 0.6% to 2,778.82.

Data on Japan’s economy for the April-June quarter better than expected and added to the optimism. The Cabinet Office reported Japan’s gross domestic product, or the total value of a nation’s goods and services, grew at a seasonally adjusted annualized rate of 1.8% during the three months ended in June, compared to the previous quarter.

Beijing lowered the trading band for its yuan again Friday but the currency was trading above the low point hit earlier in the week.

The Chinese central bank rattled financial markets when it allowed the yuan to fall to an 11-year low against the US dollar on Monday in what economists said was a “warning shot” to Washington in the midst of a tariff war.

On Friday, the People’s Bank of China set the starting point for trading at 7.0136 to the dollar, down from 7.0039 on Thursday.