Asian shares retreat after falling tech stocks drag Wall Street down

Shares retreated in Asia on Friday after losses for influential technology stocks pulled Wall Street benchmarks lower.

US futures edged higher and oil prices advanced.

Japan's Nikkei 225 index fell more than 2 per cent early in the session and was trading 1.6 per cent lower at 50,064.38.

China reported that its exports contracted 1.1 per cent in October, as shipments to the United States dropped by 25 per cent from a year earlier. But economists expect Chinese exports to recover after US President Donald Trump and Chinese leader Xi Jinping agreed last week to de-escalate the trade war between the two largest economies.

 

Hong Kong's Hang Seng index fell 0.9 per cent to 26,247.36, while the Shanghai Composite index was nearly unchanged, at 4,007.45.

South Korea's Kospi shed 2.2 per cent to 3,937.22 and Taiwan's Taiex lost 0.7 per cent.

In Australia, the S&P/ASX 200 skidded 0.8 per cent to 8,761.10.

Technology industries have helped drive markets up and down all week.

On Thursday, the S&P 500 fell 1.1 per cent to 6,720.32 and the Dow Jones Industrial Average declined 0.8 per cent, to 46,912.30. The Nasdaq fell 1.9 per cent to 23,053.99.

The biggest weights on the market included Nvidia, which dropped 3.7 per cent, and Microsoft, which fell 2 per cent. Their huge values give them outsized influence over the market's direction. Other big stocks dragging down the market included Amazon, which slumped 2.9 per cent.

Elon Musk won a shareholder vote on Thursday that would give the Tesla CEO stock worth $1 trillion if he hits certain performance targets over the next decade. The company's shares, already up 80 per cent in the past year, fell but then rose in after-hours trading, ending at $445.91.

Corporate earnings and forecasts remained the big focus for Wall Street on Thursday. The latest round of results and statements from executives could help shed some light on the condition and path ahead for the economy amid a lack of broader information on inflation, employment and retail sales because of the ongoing government shutdown.

DoorDash sank 17.5 per cent for one of the sharpest drops on Wall Street. The food delivery app warned investors that it will be spending significantly more on product development next year.

CarMax slumped 24.3 per cent after giving investors a disappointing financial update and announcing that CEO Bill Nash is stepping down in December.

Software company Datadog jumped 23.1 per cent after its latest earnings beat analysts' forecasts. Rockwell Automation rose 2.7 per cent after turning in results that easily beat analysts' forecasts.

The broader stock market has had a record-setting year, but that has raised worries that stocks could be overvalued. Those concerns are even more focused on big technology companies that have been leading the market higher amid the focus on artificial intelligence advancements.

The latest round of earnings is being closely monitored to gauge whether the market's big values are justified. They also are helping to fill in gaps in information because of the US government shutdown.

Another week of unemployment data was missing Thursday because of the shutdown. Monthly employment data for September are missing that the figures for October also will likely be delayed, as will data on consumer prices.

Outside of company updates, Wall Street is relying more on economic updates from other private sources.

Job cuts in the US surged 175 per cent in October from a year ago, according to a report released Thursday from outplacement firm Challenger, Gray & Christmas. The reasons include softer consumer and corporate spending, rising costs, and the adoption of artificial intelligence.

The US government shutdown is having a direct impact on airlines, as airports face critical staffing problems. The Federal Aviation Administration will reduce air traffic by 10 per cent starting Friday across 40 high-volume markets. American Airlines fell 2 per cent, Delta Air Lines fell 1.2 per cent and United Airlines fell 1 per cent.

European markets fell Thursday after a divided Bank of England kept its main interest rate unchanged. Asian markets closed higher.

In other dealings early Friday, US benchmark crude oil gained 35 cents to $59.78 per barrel. Brent crude, the international standard, added 36 cents to $63.74 per barrel.

The US dollar rose to 153.35 Japanese yen from 153.06 yen late Thursday. The euro fell to $1.1534 from $1.1546.