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Wall St. turns negative on trade worries, oil prices

Reuters  |  NEW YORK 

By Stephen Culp

NEW YORK (Reuters) - Wall Street turned negative in indecisive trade on Thursday, giving up earlier gains as investors grappled with renewed trade worries and rising prices.

Comments by U.S. that "has become very spoiled on trade" added fuel to investor jitters as a second round of talks was launched today in efforts to avoid a tariff war between the world's two largest economies.

Unrest in the suggested a reduction of supply and sent crude prices to their highest level in three-and-a-half years. The index <.SPNY> was up 1.2 percent, the largest gainer of the sectors.

U.S. small-cap stocks fared better than their larger rivals as the <.RUT> hit a record for the second session in a row, while bigger firms with more international exposure were pressured by rising prices and a strengthening dollar.

"It doesn't surprise us at all," said Marshall Gause, at in "If you're looking for growth, small- to mid-caps may be the place to go if you can stomach the volatility."

Trade and oil price concerns have also benefited smaller firms, according to Gause. "I think that they're in a better place," he said. "Global companies are more susceptible to that. Plus they're more susceptible to increased energy prices, typically."

Economic reports showed U.S. unemployment rolls falling to their lowest level since 1973 and manufacturers asking higher prices for their products, suggesting tightening labor market conditions and firming inflation, which support the likelihood of a Federal Reserve rate hike next month.

U.S. 10-year Treasury yields rose to a near seven-year high at 3.1220 percent, pressuring rate-sensitive sectors as investors ponder whether bonds offer an attractive alternative to riskier equities.

At 2:34 p.m. ET, the <.DJI> fell 62.71 points, or 0.25 percent, to 24,706.22, the <.SPX> lost 2.89 points, or 0.11 percent, to 2,719.57 and the Composite <.IXIC> dropped 18.80 points, or 0.25 percent, to 7,379.50.

So-called defensive stocks were among the worst percentage losers among the 11 sectors of the Rate-sensitive telecom <.SPLRCL>, and utility <.SPLRCU> shares were down in the face of increasing bond yields.

was the biggest drag on the S&P 500 and the Nasdaq, slipping 3.5 percent despite beating profit and revenue estimates in its post-market earnings report. In a research note, said investor perception is that the company is losing market share.

The S&P sector <.SPLRCT> was down 0.6 percent.

shares were down 2.3 percent. said profit margins remained under pressure due to price cuts and higher freight costs, weighing on its shares even as sales and earnings came in stronger than expected.. The retailer's stock was the biggest weight on the Dow.

Advancing issues outnumbered declining ones on the NYSE by a 1.12-to-1 ratio; on Nasdaq, a 1.47-to-1 ratio favored advancers.

The S&P 500 posted 25 new 52-week highs and 4 new lows; the Composite recorded 132 new highs and 26 new lows.

(Reporting by Stephen Culp; Editing by Nick Zieminski)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, May 18 2018. 00:36 IST