Stock Market News For May 9, 2019
Zacks Investment Research | May 08, 2019 10:02PM ET
Wall Street closed mostly lower on Wednesday as trade tensions between the United States and China lingers. No clear cut picture has emerged so far as to whether a trade deal is at all possible. The S&P 500 and Nasdaq Composite continued their losing streak while the Dow just managed to finish in the green.
The Dow Jones Industrial Average (DJI) inched up by 2.24 points to close at 25,967.33. The S&P 500 shaded 0.2% to close at 2,879.42. Meanwhile, the Nasdaq Composite Index closed at 7,943.32, declining 0.3%. The fear-gauge CBOE Volatility Index (VIX) increased 0.4% to close at 19.40, its highest closing in nearly three months. A total of 7 billion shares were traded on Wednesday, higher than the last 20-session average of 6.74 billion.Decliners outnumbered advancers on the NYSE by a 1.16-to-1 ratio. On Nasdaq, a 1.18-to-1 ratio favored declining issues.
How Did The Benchmarks Perform?
The Dow managed to close in positive territory reversing a two-day losing streak with half of its components ending in the red. The S&P 500 closed in the red for the third straight day.The Utilities Select Sector SPDR (XLU) plunged 1.4%. Notably, six out of eleven sectors of the benchmark index closed in the red while five finished in the green. Moreover, tech-heavy Nasdaq Composite also declined for the third consecutive day due to weak performance by trade-sensitive large-cap stocks.
Trade Tensions Linger
The standoff between the United States and China on trade continued. Trade tensions, which were the major cause for a stock market meltdown in 2018, appeared to be heading for an amicable solution since the beginning of this year.
However, the whole situation changed after President Donald Trump tweeted on May 5 that the U.S. government will increase tariffs from 10% to 25% on $200 billion of Chinese goods effective May 10. Moreover, Trump also threatened to impose 25% tariff on additional $325 billion of Chinese goods any time soon.
U.S. officials accuse China of “erosion of commitments” and said China is backtracking on promises which it made during the negotiation process. Though a Chinese delegation led by vice premier Liu He will visit Washington for the latest round of trade talks later this week, a deal remains uncertain.
Following the escalation of U.S.-China trade conflict, shares of major trade-sensitive stocks such as Caterpillar Inc. (NYSE:CAT) , Deere & Company (NYSE:DE) and Intel Corp. (NASDAQ:INTC) plummeted 1.3%, 1.4% and 2.5%, respectively. All three stocks carry a Zacks Rank #3 (Hold). You can see Original post
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