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US markets start 2019 with a whimper as government shutdown drags on US markets start 2019 with a whimper as government shutdown drags on
(about 1 hour later)
US stocks started the new year with a more than 1% decline on Wednesday, as weak data in Asia and Europe confirmed fears of a global economic slowdown while the US government shutdown dragged on. After their worst year in close to a decade US stocks started the new year with a more than 1% decline on Wednesday before inching their way back to positive territory then losing it again, as weak data in Asia and Europe confirmed fears of a global economic slowdown while the US government shutdown dragged on.
All 11 major S&P sectors were lower in early trading, with declines in the technology and healthcare indexes weighing the most on the market. All 30 of the Dow Industrial components were in the red. All 11 major S&P sectors were lower in early trading, with declines in the technology and healthcare indexes weighing the most on the market. All 30 of the Dow Industrial components were in the red. But by noon markets appeared to be recovering. US investors have witnessed wild daily swings at the end of 2018 and the first day of trading in the new year looked little different.
Markets dive as China manufacturing weakens in bleak start to 2019Markets dive as China manufacturing weakens in bleak start to 2019
China’s factory activity contracted for the first time in 19 months in December, hit by the Sino-US trade war, with the weakness spilling over to other Asian economies. Eurozone manufacturing activity dropped for the fifth month and barely avoided contraction. China’s factory activity contracted for the first time in 19 months in December, hit by the Sino-US trade war, with the weakness spilling over to other Asian economies. Eurozone manufacturing activity dropped for the fifth month and barely avoided contraction. That news led to sell offs across Asia earlier in the day.
The grim readings come ahead of the closely watched US manufacturing survey on Thursday, payrolls data on Friday and the US earnings season later this month, which is expected to show corporate profit shrank in the October-December quarter.The grim readings come ahead of the closely watched US manufacturing survey on Thursday, payrolls data on Friday and the US earnings season later this month, which is expected to show corporate profit shrank in the October-December quarter.
“Increasing evidence of China’s economy weakening further has sent chills throughout global markets. This fear has been a depressing factor for the markets,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a client note.“Increasing evidence of China’s economy weakening further has sent chills throughout global markets. This fear has been a depressing factor for the markets,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a client note.
At 9.56am ET, the Dow Jones Industrial Average was down 259.33 points, or 1.11%, at 23,068.13; the S&P 500 was down 27.61 points, or 1.1%, at 2,479.24 and the Nasdaq Composite was down 79.29 points, or 1.2%, at 6,555.98. By midday in New York, the Dow Jones Industrial Average was down 101 points, 0.46%, ; the S&P 500 was 10.10 points, or 0.4%, and the technology led Nasdaq Composite was down 15 points, or 0.23%.
The tech index slipped 1.15%, with Microsoft Corp and Apple down nearly 2%. Amazon and Netflix fell over 1% to drag the consumer discretionary sector down by 0.90%. The tech index – which suffered last year’s biggest losses – had earlier slipped 1.15%, with Microsoft Corp and Apple down nearly 2% and Amazon and Netflix down over 1%.
Healthcare, 2018’s best performing sector, dropped 1.61%, while energy, last year’s worst performing sector, fell 0.94% as concerns about an economic slowdown also hit oil prices. Early losses had also been driven by a fall in healthcare stocks, 2018’s best performing sector, which dropped 1.61%, while energy, last year’s worst performing sector, fell 0.94% as concerns about an economic slowdown also hit oil prices.
A low appetite for risk sparked demand for US Treasuries, sending yields on 10-year debt to a 12-month low of 2.6%.A low appetite for risk sparked demand for US Treasuries, sending yields on 10-year debt to a 12-month low of 2.6%.
Meanwhile, the US Congress is set to reconvene with no signs of a workable plan to end a 12-day-old partial shutdown and Donald Trump not budging on his demand for $5bn to fund a border wall. A Democrat plan to approve a two-part spending package does not include these funds. Market volatility is also being stoked by debelopments in Washington where the US Congress is set to reconvene with no signs of a workable plan to end a 12-day-old partial shutdown and Donald Trump not budging on his demand for $5bn to fund a border wall. A Democrat plan to approve a two-part spending package does not include these funds. The two sides are set to meet Wednesday afternoon for the first time since the shutdown began.
Stock marketsStock markets
EconomicsEconomics
Donald TrumpDonald Trump
ChinaChina
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