U.S. Stocks Slip as Trade Talks Flounder
By Caitlin Ostroff and Gunjan Banerji
Global stocks slumped Wednesday as trade talks between the U.S.
and China appeared to near an impasse, with President Trump
threatening to raise tariffs further.
The Dow Jones Industrial Average slipped 78 points, or 0.3%, in
midday trading. The S&P 500 shed 0.2%, dragged down by shares
of financials companies. The Nasdaq Composite lost less than 0.1%
after hitting a record Tuesday.
Major indexes in Europe and Asia also logged declines as
investors grew concerned that relations between the world's two
biggest economies may be further strained after the U.S. Senate
passed a bill in support of Hong Kong's antigovernment
The bill would require the U.S. Secretary of State to certify
annually that Hong Kong remained sufficiently independent from
Beijing to warrant the special status that has helped the city grow
into a global financial hub. China's Foreign Ministry said the act
was a violation of international law, while Hong Kong officials
said foreign legislatures shouldn't interfere with its internal
"The Chinese aren't very happy about that bill progressing,"
said Paul Flood, multiasset portfolio manager at Newton Investment
Management. "It does make the tariffs discussion more
A breakdown in the trade talks would derail the White House's
plans for a limited "phase one" agreement this year. Investors are
also growing jittery that fresh tariffs on Chinese products
including smartphones and toys may be put into effect Dec. 15,
directly hitting American consumers. Mr. Trump said in a Tuesday
cabinet meeting that China needs to make a deal he likes to avoid
levies going even higher.
In an interview on CNBC Wednesday, Federal Reserve governor Lael
Brainard highlighted that trade uncertainty has been pressuring the
Still, she said she sees the economy continuing to grow next
The strength of the U.S. consumer was on display Wednesday as
corporate earnings drove swings among shares of individual
companies. Shares in Target climbed about 12% -- on track for a
fresh record -- after the retail chain posted another quarter of
rising sales as the company continued to draw more shoppers online
and in its stores.
Lowe's shares jumped about 4% after the home-improvement
retailer raised its profit forecast and disclosed plans to shut
some Canadian stores.
Yana Barton, an equity portfolio manager at Eaton Vance, said
she's optimistic about the stock market's near-term trajectory
after major indexes have hit a string of recent records. But, she
said "a lot of that really hinges on trade and moving from a
strategy of hope, to one that has actual meat around some kind of
Urban Outfitters dropped 14% after the retailer's third-quarter
Meanwhile, the pan-continental Stoxx Europe 600 index fell 0.4%,
led by declines in almost every sector.
Investors reached for haven assets, sending the yield on 10-year
Treasurys to 1.764% Wednesday, according to Tradeweb, from 1.785%
Tuesday. Bond yields across Europe also fell, with the German
10-year bund recently yielding minus 0.368%, from minus 0.337%
Later today, the Federal Reserve will issue its October policy
meeting's minutes, which may offer further clues about the
direction of future policy.
Write to Caitlin Ostroff at firstname.lastname@example.org and Gunjan
Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
November 20, 2019 13:08 ET (18:08 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.