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Stocks Slip on China-US Tensions; Oil Resumes Slide

Voice of America
11 Dec 2018, 04:05 GMT+10

NEW YORK - Stocks around the world are falling Monday morning, and U.S. indexes gave up modest early gains and turned lower, hurt by sharp drops for energy and financial companies.

The British pound is dropping after the U.K. prime minister postponed a vote on its departure from the European Union, and oil has resumed its sharp slide.

Keeping score: The S&P 500 index lost 47 points, or 1.8 percent, to 2,585, as of 11 a.m. Eastern time. The Dow Jones industrial average fell 435 points, or 1.8 percent, to 23,904, and the Nasdaq composite dropped 73, or 1.1 percent, to 6,894.

U.S. indexes have been lurching up and down since October, mostly down, and the S&P 500 plunged 4.6 percent last week for its biggest loss in more than eight months, as investors felt the U.S. and China are still nowhere close to ending their trade dispute.

Volatility has been high not only week to week but also minute to minute. The S&P 500 zoomed from a gain of 0.2 percent to a loss of 1.8 percent Monday morning.

Brexit pause: British Prime Minister Theresa May postponed a vote on her deal for Britain to exit the European Union, which had been scheduled for Tuesday. She acknowledged that she would have lost the vote by a significant margin.

The pound sank to $1.2517, down from $1.2751 late Friday. The FTSE 100 stock index fell 0.5 percent.

Huawei CFO Arrest: China raised the pressure over the weekend on the United States and Canada following the detention of Huawei Chief Financial Officer Meng Wanzhou. She is suspected of trying to evade U.S. trade curbs on Iran, and she was detained while changing planes in Canada.

China summoned both the U.S. and Canadian ambassadors to meetings over the weekend, where it protested the detention and called it ``extremely egregious.''

Meng's arrest has jolted the stock market, and investors fear it is adding to the tensions between the world's two largest economies.

Energy: Benchmark U.S. crude fell 98 cents, or 1.8 percent, to $51.66 per barrel in New York. Brent crude, the international standard, lost 40 cents to $61.27 a barrel.

It's a resumption of the steep decline for crude's price that began in October. Last week, crude steadied after OPEC and other major oil producers said they will reduce production by 1.2 million barrels a day starting from January. The cuts will last for six months.

Energy stocks in the S&P 500 fell 2.7 percent for the largest loss among the 11 sectors that make up the index.

Overseas markets: In Europe, Germany's DAX lost 1.2 percent, and the CAC 40 in France declined 1.1 percent.

Asian stocks were hurt by weak economic data from Japan and China. Revised data showed the Japanese economy shrank by 2.5 percent in the third quarter, a larger decline than analysts expected. Chinese imports and exports climbed at a much slower pace in November than they had in October.

Japan's benchmark Nikkei 225 slid 2.1 percent, South Korea's Kospi fell 1.1 percent and Hong Kong's Hang Seng shed 1.2 percent.

Bulking up: Nutrisystem surged 27.5 percent to $43.61 after Tivity Health agreed to buy it for $47 a share in cash and stock. That's a 37 percent premium from the weight loss company's closing price on Friday. Tivity stock dropped 32.7 percent to $27.32.

Bad reviews: One of Yelp's biggest shareholders said it wants online reviews company Yelp to add new directors to its board. SQN Investors said the board hasn't held itself responsible for strategic mistakes and weak quarterly reports, and should add representatives for shareholders.

The stock rose 2 percent to $35.27.

Bonds: The yield on the 10-year Treasury note fell to 2.83 percent from 2.85 percent late Friday. The 30-year yield fell to 3.11 percent from 3.14 percent.

Other currencies: The dollar rose to 112.94 Japanese yen from 112.64 yen late Friday. The euro slipped to $1.1375 from $1.1422.

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