U.S. Stocks Waver on Weak Economic Data
October 03 2019 - 10:10AM
Dow Jones News
By Avantika Chilkoti
U.S. stocks were little changed Thursday as a fresh round of
weak economic data around the world raised investors' concerns
about global growth.
The Dow Jones Industrial Average fell 23 points, or less than
0.1%, to 26055 shortly after the opening bell. The S&P 500
added less than 0.1% and the Nasdaq Composite climbed less than
0.1%.
Later Thursday, investors will be watching for data on U.S.
services activity in September, as well as August factory orders,
for clues about growth in the world's largest economy.
Shares of PepsiCo rose 2.8% on a better-than-expected earnings
report. The food-and-beverage company posted strong revenue growth,
though foreign-exchange moves weighed on the business.
The Stoxx Europe 600 slipped 0.1% in afternoon trade, after
suffering its worst performance this year Wednesday.
Fresh data added to the gloomy outlook for the broader European
economy. The IHS Markit composite purchasing managers index -- an
aggregate measure of activity among manufacturers and service
providers -- fell to 50.1 in September from 51.9 in August, the
lowest reading since June 2013.
U.K. stocks were a weak spot in the region, with London's FTSE
100 down 1.1% after a weak reading on the country's services
sector, and fresh Brexit tensions.
The U.K. services purchasing managers index hit a six-month low
of 49.5, below the 50 level that marks contraction. The figures
reignited concerns that the economy is in recession, analysts at
Capital Economics said, adding that economic performance will
remain "well below par" while Brexit negotiations drag on.
Meanwhile, European officials gave a cool response to British
Prime Minister Boris Johnson's new proposals to break the deadlock
over Brexit, just weeks ahead of the U.K.'s scheduled exit from the
European Union.
Investors were also still digesting the news that the U.S. will
impose new tariffs on EU goods, including jetliners, Irish and
Scotch whiskies, cheeses and hand tools, starting later this
month.
"The total size or volume of tariffs being applied to what does
amount to quite an array of goods is actually very small when you
consider just the goods trade between the U.S. and the European
Union," said Matt Cairns, rates strategist at Rabobank.
The yield on U.S. 10-year Treasurys dropped to 1.590% Thursday,
from 1.594% Wednesday. Bond yields and prices move in opposite
directions.
The WSJ Dollar Index, which measures the currency against a
basket of its peers, was down 0.1%.
"The [global] economy is fine without further escalation of the
trade war, but what does an investor really have in terms of the
next step in trade wars?" said Emiel van den Heiligenberg, head of
asset allocation at Legal and General Investment Management. "No
one can really predict what Trump will do next and that makes
investors nervous."
In Asia, Japan's Nikkei was down 2%, while Hong Kong's Hang Seng
closed up 0.3%. Stock markets in China and South Korea were closed
on Thursday.
Joanne Chiu contributed to this article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
October 03, 2019 09:55 ET (13:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Mar 2024 to Apr 2024
FTSE 100
Index Chart
From Apr 2023 to Apr 2024