US economy

Wall Street ends lower as oil, tech slide


US stocks dropped on Friday as technology shares retreated and slumping oil prices continued to weigh on the energy sector.

Wall Street seemingly turned a corner after a rough October, when equities took a hit from global trade tensions and rising interest rates. The market mounted a rally early in the week as the conclusion of US midterm elections lifted a cloud of political uncertainty, but oil’s rapid downturn and expectations that the Federal Reserve will move forward with another rate rise in December dragged on investor sentiment to close the week.

The S&P 500 slipped 0.9 per cent, paring heavier losses seen in afternoon trading. Energy shares were down roughly 0.4 per cent, while communication services retreated 1.5 per cent. Technology was the worst of the 11 S&P sectors, dropping 1.7 per cent. Consumer staples, a defensive investment play, was the best performer with a gain of 0.5 per cent.

The Dow Jones Industrial Average was down 0.8 per cent, and the tech-heavy Nasdaq Composite lost nearly 1.7 per cent.

For the week, the S&P 500 rose more than 2 per cent, while the Dow climbed by nearly 3 per cent. The Nasdaq gained less than 1 per cent.

Crude prices have plummeted in recent weeks amid signs of rising stockpiles. Washington granted temporary relief to eight nations as sanctions on Iranian crude exports returned, lessening expectations that global supplies would suffer. Meanwhile, the US has maintained pressure on Gulf allies to keep their spigots open in hopes of keeping prices in check.

West Texas Intermediate notched its 10th consecutive day of losses, the longest streak on record, after closing in a bear market Thursday. Brent crude, the international benchmark, entered a bear market as it dipped below $70 a barrel for the first time since April.

WTI crude settled 0.8 per cent lower at $60.19 a barrel. Brent was trading down 0.5 per cent, hitting $70.26 a barrel.

Fresh economic data out of China also contributed to market jitters on Friday. Producer inflation was down in October, the fourth straight month of declines, as manufacturing activity and domestic demand weakened. Car sales in the world’s top auto market also fell last month.

In the US, wholesale inflation rebounded in October to the quickest monthly pace in eight years.

President Donald Trump is set to meet his Chinese counterpart, Xi Jinping, later this month amid a trade dispute between the world’s largest economies. During a speech in Washington, Mr Trump’s trade adviser Peter Navarro warned that if a deal eventually materialises, it will be on the US’s terms. Navarro, a fierce critic of China’s economic policies, also warned Wall Street executives to “get out of the negotiations.”

The DXY dollar index, a measure of the greenback against a weighted basket of peers, rose 0.2 per cent to 96.889.

The yield on the 10-year Treasury note fell 4.5 basis points to 3.1875 per cent.

In corporate news, shares of General Electric fell 5.6 per cent after an analyst at JPMorgan lowered his price target to $6 a share and raised concerns about the industrial conglomerate’s debt load. GE responded to the report with a statement saying it remains a “fundamentally strong company with a sound liquidity position.”

Activision Blizzard’s stock lost 12.4 per cent of its value after the video game maker reported a decline in monthly active users for the third straight quarter.

California utilities PG&E and Edison International posted declines of 16.5 per cent and 12.1 per cent, respectively, as wildfires ravaged parts of the state.



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