U.S. Stocks Waver Amid Uncertainty on Trade Dealal
October 31 2019 - 10:12AM
Dow Jones News
By Caitlin Ostroff
U.S. stocks opened little changed Thursday following fresh
concerns about the U.S.-China trade deal and the Federal Reserve's
signals that it may pause interest-rate cuts.
The S&P 500 dropped less than 0.1% shortly after the opening
bell. The index had notched on Wednesday its second record close of
the week. The Dow Jones Industrial Average fell 0.1% to 27144 and
the Nasdaq Composite rose 0.1%.
Chinese officials have warned that they won't budge on some of
the most difficult issues that need to be negotiated with the U.S.,
and expressed concerns that President Trump may back out of even
the initial deal they hope to reach in coming weeks, according to
Bloomberg.
The markets have underestimated the difficulty in negotiating a
long-term deal between the two nations given the complexity of
their links, according to Neil Dwane, global strategist at Allianz
Global Investors.
"There are many, many facets to the changing relationship
between the U.S. and China," Mr. Dwane said. "The trade issue is
arguably the least important."
Meanwhile, U.S. households slightly increased their spending in
September, a sign consumers remained on steady -- though more
cautious -- footing heading into the fourth quarter.
Personal-consumption expenditures, or household spending,
increased a seasonally adjusted 0.2% in September from August, the
Commerce Department said Thursday. Outlays rose at a similar pace
in August after growing more briskly in the first half of 2019.
Elsewhere, the pan-continental Stoxx Europe 600 gauge dropped
0.2%.
European stocks wavered earlier in the day as investors also
took note of the Fed's policy statement, which signaled a higher
hurdle for rate reductions after its third cut this year.
Assets considered to be a haven at times of uncertainty saw an
uptick. Gold climbed and government-bond prices rose.
Early U.S. trading saw major moves in blue-chip stocks.
Facebook jumped 4.9% after the social-media giant's quarterly
profit and sales exceeded Wall Street's expectations. Kraft Heinz
shares jumped 8% after the food company beat forecasts for its
quarterly profit.
Apple ticked up 1.8% after it reported growth in gadgets and
services that helped offset a decline in iPhone sales.
Over in Europe, Peugeot maker PSA Group was the worst performer,
dropping 13.4% following its agreement to merge with Fiat Chrysler
Automobiles in a deal that will create one of the world's largest
auto makers by volume.
Fiat shares climbed 7.7% in Milan, while shares of rival Renault
slumped 3.4%.
Royal Dutch Shell shares trimmed 3.1% after the oil giant
expressed uncertainty over the pace of it completing its $25
billion share buyback, raising doubt over whether the program would
be finished by the end of 2020.
Earlier Thursday, data showed Chinese manufacturing activity
fell to an eight-month low in October, in another signal that the
world's second-largest economy is under pressure from the trade
tensions. The Shanghai Composite Index fell 0.4%.
Write to Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
October 31, 2019 09:57 ET (13:57 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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