Yahoo Finance Stock Market News For Dec 10, 2018
Wall Street declined sharply on Friday as initial enthusiasm over a solution to the ongoing trade war the United States and China faded. Arrest of the CFO of Chinese tech-behemoth Huawei Technologies and news Chinese hackers being charged by federal prosecutors has severely shaken investors’ faith in stock markets. All three major stock indexes closed deep in the red for the day as well as for the week.
The Dow Jones Industrial Average (DJI) closed at 24,388.95, plunging 2.2% or 558.72 points. The S&P 500 Index (INX) shed 2.3% to close at 2,633.08. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,969.25, declining 3.1% or 219.01 points. A total of 8.7 billion shares were traded on Friday, higher than the last 20-session average of 7.9 billion shares. Decliners outnumbered advancers on the NYSE by 2.08-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 2.63-to-1 ratio. The CBOE VIX increased 9.6% to close at 23.23.
How Did the Benchmarks Perform?
The Dow ended in negative territory for the third straight day. The blue-chip index has also finished in the red year to date. Notably, all 30 components of the index closed in the red.
The S&P 500 also closed in negative territory for the third successive day. The Technology Select Sector SPDR (XLK), Consumer Discretionary Select Sector SPDR (XLY), Industrials Select Sector SPDR (XLI), Health Care Select Sector SPDR (XLV) and Materials Select Sector SPDR (XLB) lost 3.5%, 3%, 2.6%, 2.5% and 2.4% respectively. The benchmark index is in the red year to date. Notably, ten out of 11 sectors of the S&P 500 closed in the red while only one finished in the green.
The tech-heavy Nasdaq Composite closed in the red reversing its previous trading day’s gain due to lackluster performance by large-cap tech giants.
US-China Trade Solution in Jeopardy
Hopes of an amicable solution to the trade related conflict between the United States-China following the Dec 1 meeting between President Trump and his Chinese counterpart Xi Jinping have all but faded out.
Trade fears were renewed after Canadian authorities in Vancouver arrested Meng Wanzhou, Huawei Technologies Co.’s chief financial officer and daughter of its founder Ren Zhengfei on Dec 1. Notably, Wanzhou’s detention for alleged violation of Iranian sanctions by Chinese tech-behemoth Huawei Technologies Co was carried out at the request of the U.S. government.
On Dec 9, China summoned the U.S. ambassador to Beijing to protest the detention of Meng Wanzhou in Canada at Washington's behest and demanded that the U.S. government cancel the order for her arrest.
The situation worsened after The Wall Street Journal reported that federal prosecutors are likely to press charges on Chinese hackers on account of hacking valuable technologies of the U.S. high-tech firms. Moreover, on Dec 9, U.S. Trade Representative Robert Lighthizer said that he considers Mar 1 "a hard deadline" to reach a deal with China. Failing which the tariff war is likely to go on.
Consequently, shares of trade-sensitive stocks like Deere & Co. DE and Apple Inc. AAPL plummeted 4.6% and 3.6%, respectively. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
On Dec 7, the Department of Labor reported that U.S. economy created 155,000 non-farm jobs in November lagging the consensus estimate of 198,000. Employment in October was revised downward to 237,000 from the figure of 250,000 reported earlier. Unemployment rate, however, stood at 49-year low of 3.7%, at par with the consensus estimate.
The amount of money the average worker earns increased $0.06 to $27.35 or 0.2% an hour in November, missing the consensus estimate of an increase of 0.3%. However, Yearly increase in hourly wages remained flat at 3.1%, its highest since 2009.
Weekly Roundup
In the first week of December, all three major stock indexes – the Dow, S&P 500 and Nasdaq Composite – plummeted. The Dow plunged nearly 1,149 points or 4.5%, the S&P 500 declined 97 points or 4.6% and the Nasdaq Composite dropped 361 points or 4.9%. The first week of December was the worst week for U.S. stocks since March.
U.S. stocks rallied on Monday following temporary cease fire of trade-related conflict between the United States and China. However, Wall Street routed since Tuesday as yields on 2-Year US Treasury Note and 3-Year US Treasury Note surpassed the yield on 5-Year US Treasury Note. Moreover, investors became skeptical regarding a permanent solution to the United States and China trade conflicts.
The situation further aggravated following the detention of Meng Wanzhou, Chinese tech-giant Huawei Technologies Co.’s chief financial officer at Vancouver in Canada. Herarrest was carried out at the request of the U.S. government which prompted China to summon the U.S. ambassador to Beijing to protest the detention and demanded her immediate release.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Apple Inc. (AAPL) : Free Stock Analysis Report
Deere & Company (DE) : Free Stock Analysis Report
To read this article on Zacks.com click here.
