U.S. Stocks Trade Lower to Start the Week
October 22 2018 - 10:39AM
Dow Jones News
By Will Horner
U.S. stocks edged lower Monday, as rising shares of some tech
and consumer-discretionary companies weren't enough to buoy major
indexes.
The Dow Jones Industrial Average fell 81 points, or 0.3%, to
25363 soon at about 10 a.m. Eastern, while the S&P 500 dropped
0.37%. The Nasdaq Composite was roughly flat, losing 0.1% as the
tech-heavy index looked to snap a three-session losing streak.
Earlier, tech companies in the S&P 500 rose 0.5%, while
consumer-discretionary stocks added 0.4%, helping to pare those
sectors' deep losses for the month. A mix of some upbeat earnings
news and an improving economic outlook in China helped reinvigorate
two sectors of the stock market that have suffered heavy selling
pressure over the last three previous sessions.
The gains in the U.S. followed advances around most of the rest
of the world after proposed Chinese tax cuts drove bumper gains for
Chinese equities that fed into milder increases for European
markets.
The Shenzhen A Share index was up nearly 5% while the Shanghai
Composite was up around 4%, continuing a rally in Chinese stocks
that began at the end of last week. Japan's Nikkei was up 0.4%.
The Stoxx Europe 600, meanwhile, was little changed. The Italian
FTSE MIB was up 0.3% and yields on the nation's bonds fell after an
Italian credit-rating downgrade came, in line with expectations.
Yields move inversely to prices.
In China, the strong gains for stocks were fueled by a proposed
cut in personal income tax Saturday, said Geoffrey Yu, head of the
U.K. investment office at UBS Global Wealth Management.
"When it comes to thinking about Chinese stimulus, the
government is finally starting to get the message and is focusing
on tax reform and away from investment," Mr. Yu said. "If this can
help the Chinese household it doesn't just help China, it helps the
world."
The measures could boost retails sales by about 1%, said Jim
Reid, an analyst at Deutsche Bank, in a note to clients, adding
that the bank believes they are part of a series of tax cuts.
"These measures would help to offset the downside risks from the
trade war, and keep growth in 2019 above 6%," Mr. Reid said.
In the week ahead, attention will be on an investment conference
in Saudi Arabia taking place Tuesday. U.S. Treasury Secretary
Steven Mnuchin, JPMorgan CEO James Dimon and BlackRock head Larry
Fink, among others, have pulled out of the so-called "Davos in the
desert" due to the killing of Saudi journalist Jamal Khashoggi in
the nation's consulate in Istanbul.
--Michael Wursthorn contributed to this article.
(END) Dow Jones Newswires
October 22, 2018 10:24 ET (14:24 GMT)
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