U.S. stocks pare losses as tech gains

The News-Times - - BUSINESS -

U.S. eq­ui­ties closed up from the lows of the day af­ter a late rally in large tech­nol­ogy stocks helped to pro­pel the Nas­daq 100 higher in what was the big­gest rev­er­sal for the in­dex since April.

The S&P 500 and Dow Jones In­dus­trial Av­er­age ended in neg­a­tive ter­ri­tory. Fi­nan­cial mar­kets re­mained volatile on bets that the trade truce be­tween China and the U.S. won’t last af­ter the ar­rest of Huawei’s chief fi­nan­cial of­fi­cer. Bank shares in the S&P 500 fell as much as 3.9 per­cent be­fore closing down 1.4 per­cent, as Trea­sury yields slid to the low­est since Au­gust.

Help­ing to ease anx­i­ety were com­ments from two re­gional Fed­eral Re­serve pres­i­dents urg­ing pol­icy cau­tion from the U.S. cen­tral bank amid mount­ing eco­nomic un­cer­tain­ties and re­cent volatil­ity in fi­nan­cial mar­kets.

“The big­gest qualm is the trade war es­ca­lat­ing and this is haunt­ing the mar­kets,” said Naeem As­lam, chief mar­ket an­a­lyst at Think Mar­kets U.K. in Lon­don, in an email. “It is ar­du­ous to find bulls in the mar­ket and it seems to me that this game is about to be­come uglier.”

Oil con­tin­ued to be a drag on fi­nan­cial mar­kets, with West Texas In­ter­me­di­ate back to $51 a bar­rel as OPEC min­is­ters seek a deal to cut out­put. En­ergy pro­duc­ers in the S&P 500 sank more than 3 per­cent, and emerg­ing-mar­ket eq­ui­ties plunged.

Traders pointed to a spate of other cat­a­lysts for the re­newed risk-off tone that’s grip­ping fi­nan­cial mar­kets. Bank of Ja­pan Gover­nor Haruhiko Kuroda said eco­nomic risks from abroad could be se­vere, and the Fed’s Beige Book re­port showed fad­ing op­ti­mism over growth prospects at U.S. firms even as most dis­tricts con­tin­ued to re­port a mod­est ex­pan­sion. The pound drifted as U.K. Prime Minister Theresa May searched for a com­pro­mise to avoid a crush­ing de­feat on her Brexit deal in a key vote in Par­lia­ment next week.

Whether or not it trig­gered the slide, Canada’s ar­rest of the Huawei CFO and re­ports it may ex­tra­dite her to the U.S. are a blow to al­ready frag­ile sen­ti­ment, just days af­ter an ap­par­ent break­through on trade be­tween Amer­ica and China. The start of the fu­tures ses­sion was marred by a sud­den and un­ex­pected plunge that sent a shock wave across eq­uity mar­kets.

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