Global Stocks Struggle After Bad Month

  • Global Stocks Struggle After Bad Month

Global Stocks Struggle After Bad Month

An afternoon recap of the day's most important business news, delivered weekdays.

By 13:09 p.m. ET, all the major sectors in the S&P 500 were down in response along with 29 of the 30 components of the Dow Industrial Average. The Russell 2000 index of small-cap stocks fell 5.06, or 0.3 percent, to 1,507.39.

The Dow Jones industrial average fell 306, or 1.2 per cent, to 24,302, and the Nasdaq composite dropped 35, or 0.5 per cent, to 7,144.

A trade war would threaten one of the key reasons investors were optimistic about stocks coming into 2018: The global economy was finally strengthening in sync, which should lead to higher corporate profits. Apple, the most valuable US company, got 63 percent of its sales from outside the United States in its latest fiscal year.

Phil Orlando, chief equity strategist at Federated Investors in NY, said Trump's announcement was made to call everyone's attention to the USA trade deficit but investors decided that a full-blown global trade was not going to happen.

If Trump follows through on his tariff promise, it could raise costs for companies that use lots of steel, which could lead to higher inflation. It was down as much as 10 percent earlier.

Stocks of smaller USA companies, which tend to do more of their business at home, did much better than the rest of the market. Heavy equipment maker Caterpillar lost $3.12, or 2 percent, to $151.54 and aerospace giant Boeing gave back $8.59, or 2.4 percent, to $353.70.

Bond prices rose as demand jumped for safer investments, which pushed yields lower.

OVERSEAS: France's CAC 40 fell 1.1 percent and Germany's DAX was down 2 percent.

Global stocks mostly fell Thursday as investors braced for a testimony by Federal Reserve Chairman Jerome Powell and monitor the lack of progress on Brexit in Europe.

McDonald's stock dropped on fears that its value menu isn't drumming up much in sales, and an analyst at RBC Capital Markets cut his expectations for the chain's sales in the United States. Some investors took that as a signal that the Fed may get more aggressive about raising rates, which sent stocks down and Treasury yields higher.

Powell told the Senate Finance Committee that he does not see inflation in workers' wages "at a point of acceleration".

Volatility returned to markets during February with a vengeance. Britain's FTSE 100 shed 0.8 percent at 7,177.

Among the biggest losers on Wednesday in the S&P 500 was Lowe's, which reported weaker profit for the last quarter than analysts expected.

Dental products supplier Patterson Companies plunged 23 percent in the first few minutes of trading Thursday after issuing weak quarterly results.

Shares of TD were up 92 cents, or 1.24 per cent, to $74.92 after its first-quarter profits beat market expectations, despite a hefty charge due to US tax reform, to close out another strong earnings season for Canada's biggest lenders.

Energy companies turned lower after the price of oil sank. Benchmark U.S. crude rose 14 cents to $61.13 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude, the global standard, rose 54 cents to $64.37 a barrel.

Gold dropped $5.50 to $1,312.40 per ounce.

CURRENCIES: The dollar weakened to a fresh 15-month low, slipping to 106.01 from 106.24 yen late Thursday. The euro inched up to $1.2207 from $1.2203, and the British pound slipped to $1.3732 from $1.3771.