Stocks – Dow Reverses Gains to Close Lower as Trade Turmoil Continues


Stocks - Dow Reverses Gains to Close Lower as Trade Turmoil Continues – Stocks closed lower as sentiment was rocked by fears a global trade war could be brewing amid uncertainty about the outcome of U.S.-Canada trade talks, which reportedly are set to resume next week.

The Dow Jones Industrial Average fell about 0.09%. The S&P 500 rose 0.01%, while the Nasdaq Composite rose about 0.26%. The Dow and the S&P 500 ended August up about 2% and 3% respectively, their best performances for the month since 2014.

A successful outcome for U.S.-Canada talks to revamp the North American Free Trade Agreement (NAFTA) was thrown into doubt, as both countries failed to reach an agreement by the Friday deadline imposed by the Trump administration. But fears were tempered by reports suggesting talks would resume on Wednesday.

Still, President Trump is willing to press ahead with a U.S.-Mexico deal, though is open to including Canada if negotiations are successful, according U.S. Trade Representative Robert Lighthizer.

“Today the President notified the Congress of his intent to sign a trade agreement with Mexico – and Canada, if it is willing – 90 days from now,” Lighthizer said in a statement. “The agreement is the most advanced and high-standard trade agreement in the world.”

Heading into the final round of talks, Canada-U.S. relations were strained as Trump said that a pact with Canada would be on U.S. terms, while Ottawa vowed against accepting “just any deal.”

The news threw further doubt on whether a global trade war could be averted as the United States and Europe seemingly swerved back onto a collision course after Trump rejected EU’s proposal to eliminate tariffs on cars if the U.S. did the same, claiming the offer is “not good enough.”

Trade tensions were thrust into the spotlight on Thursday, following a report that Trump planned to move ahead with tariffs on $200 billion of Chinese goods, risking retaliation from Beijing.

Industrial heavyweights such as Boeing (NYSE:BA) and Caterpillar (NYSE:CAT), both of which have huge international exposure, symbolised fears that a global trade war may be in the offing, as both ended the day lower.

Energy stocks, meanwhile, also felt the pressure from rising trade tensions as oil prices settled lower Friday, but posted a monthly gain as falling U.S. supplies and bets on potential a slump in Iranian crude exports have supported sentiment.

On the New York Mercantile Exchange crude futures for October delivery fell 45 cents settle at $69.80 a barrel.

Upbeat economic data, meanwhile, showing an improvement in consumer sentiment had little impact on market direction.

The University of Michigan index was 96.2 in August, above both a previous reading of 95.3, and economists’ expectations for a reading of 95.5.

On the corporate news front, Coca-Cola (NYSE:KO) stock fell nearly 1% after the beverage giant agreed to buy the U.K. chain Costa Coffee for £3.9 billion ($5.1 billion).

Top S&P 500 Gainers and Losers Today:

Ulta Beauty (NASDAQ:ULTA), DaVita HealthCare (NYSE:DVA) and NRG (NYSE:NRG) were among the top S&P 500 gainers for the session.

Goodyear (NASDAQ:GT), AES (NYSE:AES) and Cooper Companies (NYSE:COO) were among the worst S&P 500 performers of the session.


Please enter your comment!
Please enter your name here