Global shares fell on Friday as political developments triggered a wave of negativity across markets.
The Dow Jones Industrial Average fell 126 points or 0.5%. The S&P 500 also declined by 0.5%. The Tech-Heavy Nasdaq Composite declined 0.6%, surpassing the earlier loss of over 1%.
Health care stocks reported the biggest drop in the S&P 500 index around noon. The region had decreased 1.1% while US President Donald Trump prepared to sign executive orders aimed at lowering drug prices. He is scheduled to sign the order after delivering the remarks at 3pm on Friday.
Beijing made good its threat to retaliate against the US after the Trump administration ordered the closure of the Chinese consulate in Houston. China ordered the US to close its consulate in Chengdu, as the conflict between two of the world’s largest economies intensified on Friday.
Asian markets fell overnight, with Hong Kong’s Hang Seng index falling 2.2%, China’s Shanghai Composite down 3.9% and Shenzhen Composite down 5%. Geopolitical tensions with the technology selloff on Wall Street late on Thursday ensured the spread of Europe. The Pan-European Stokes 600 slipped 1.7%. German DAX was down 2% and French CAC 1.5%.
After Intel (ticker: INTC) warned that production problems could delay the next generation of its nanometer chips by at least six months, European microchip companies Infineon Technologies and ASML went into recession. Intel’s share slipped 15%.
Late Thursday’s recession on Wall Street was led by Apple and Microsoft,
The sell-off in large-cap stocks spiraled, accounting for more than half of the Dow’s losses as concerns over weak employment figures and another congressional financial aid package. Tesla,
Netflix and Google parent Alphabet all fell.
There was some good news in Europe, but it was largely ignored by investors in view of the widespread mood early Friday.
French trade activity beat expectations in July, rebounding more than expected, after the lockdown measures were lifted, according to the Procurement Managers Index closely. The German manufacturing sector also avoided a contraction for the first time in 19 months. In further positive signs, UK retail sales rose 13.9% in June, beating consensus estimates of 8.3% growth, with sales now exceeding pre-crisis.
Oil closed 0.6% down at $ 40.82 a barrel in mid-Friday afternoon.
British gas owner Centrica grew 17% after announcing it sold its US energy business to Direct Energy for $ 3.6 billion to NRG Energy.
Vodafone’s stock fell 4.7%, as the world’s second largest mobile operator confirmed plans to list its towers business in Frankfurt next year. The company’s revenue fell 1.4% to € 10.5 billion ($ 12.2 billion) in the fiscal first quarter.
Mid-day trading saw a 0.9% drop in American Express (AXP) shares as the credit-card issuer reported a surge in profits and a sharp drop in revenue as orders expanded by business and luxury shoppers to stay at the expense Fall due to living.
Shares of E * TRADE Financial (ETFC) declined 0.5% despite reporting better quarter-on-quarter late on Thursday, raising trading volume in response to volatility caused by the coronovirus crisis. E * business is set to be acquired by Morgan Stanley (MS) later this year.
Goldman Sachs (GS) shares changed slightly after the bank reached Malaysia for $ 3.9 billion in the 1Malaysia Development Berhad scam. The scandal, which accused the bank and 17 current and former directors of misleading investors of more than $ 6.5 billion in bond sales, has long been an overhang on the stock.
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