US Market dips on Middle East tensions

The US stock market finished session slight lower on Tuesday, 07 January 2020, as favorable U.S. economic data outweighed by concerns about the possibility of war in the Middle East after Iran fired a series of missiles at an Iraqi airbase that hosts American troops. At closing bell, the Dow Jones Industrial Average shed 119.70 points, or 0.42%, at 28,583.6, while the S&P 500 lost 9.10 points, 0.28%, at 3,237.18. The Nasdaq Composite Index fell 2.88 points, or 0.03%, at 9,068.58.

Equity investors have been jittery since late last week amid uncertainty about the impact of rising tensions between the U.S. and Iran following the U.S. airstrike that killed top Iranian military commander Qasem Soleimani.

President Trump said the U.S. remains prepared to attack if Iran retaliates against America, but walked back a threat to target the country's cultural sites, while speaking at a White House press briefing Tuesday afternoon. U.S. Defense Secretary Mark Esper on Tuesday said he expects retaliation by Iran in some way, adding that the U.S. isn't seeking war with the Islamic Republic but would be prepared to finish one.

Iran had fired several rockets at two joint U.S.-Iraqi bases early Wednesday morning in retaliation for the killing of a top Iranian military leader. Tehran has promised to retaliate for a U.S. airstrike that killed Iran's top military commander last week.

Meantime, investors continue to weigh developments on the trade front with the first phase of the U.S.-China trade deal expected by many to be signed on Jan. 15.

On the U.S. economic front, US Trade Deficit Narrows Significantly In November --The Commerce Department released a report showing the U.S. trade deficit narrowed to $43.1 billion in November from a revised $46.9 billion in October. The narrower trade deficit came as the value of exports climbed by 0.7 percent to $208.6 billion, while the value of imports slumped by 1.0 percent to $251.7 billion.

US Non-Manufacturing Growth Advances In December- US service sector activity index climbed to 55.0 in December after dipping to 53.9 in November, with a reading above 50 indicating growth in the service sector, the Institute for Supply Management revealed in a report on Tuesday. The bigger than expected rebound by the headline index reflected a substantial acceleration in the pace of growth in business activity, with the business activity index spiking to 57.2 in December from 51.6 in November. On the other hand, the report said the new orders index slid to 54.9 in December from 57.1 in November, indicating a slowdown in the pace of growth in new orders. The employment index also edged down to 55.2 in December from 55.5 in November, suggesting the pace of job growth in the service sector slowed slightly during the month.

US Factory Orders Fall 0.7% In November-US factory orders fell by 0.7 percent in November after inching up by a downwardly revised 0.2 percent in October, a report released by the Commerce Department on Tuesday showed. The report said durable goods orders tumbled by 2.1 percent in November after edging up by 0.2 percent in October, reflecting a modest revision from the previously reported 2.0 percent slump. The nosedive in durable goods orders was partly offset by a continued increase in orders for non-durable goods, which climbed by 0.6 percent in November after rising by 0.3 percent in October. The Commerce Department said shipments of manufactured goods rose by 0.3 percent in November following a 0.1 percent uptick in October. Inventories also increased by 0.3 percent.

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