Wall Street subdued on mixed PMI, U.S.-China trade concerns

Markets Little Moved As US Fed Delivers Rate Cut
September 19, 2019
Le Fonti International – September 23
September 23, 2019

Wall Street subdued on mixed PMI, U.S.-China trade concerns

(Reuters) – Wall Street’s main indexes were flat on Monday as mixed economic cues did little to soothe investor concerns over slowing domestic growth in the face of a prolonged U.S.-China trade war.

U.S. employment in the services sector shrank for the first time in nine-and-a-half years, IHS Markit’s Purchasing Manager’s Index (PMI) showed on Monday. At 50.9, the services sector PMI was below expectations of 51.3, but the reading above 50 showed that it was still in expansion mode.

The index also showed manufacturing activity rose to 51 in September from 50.3 in August, topping expectations of economists polled by Reuters.

The report follows dour business surveys from across the euro zone, which suggested growth had ground to a halt in the bloc.

“We had some macro news today, but nothing that would change the sentiment in the market, which is tied to trade,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

Investors have been cautious about progress in Sino-U.S. trade talks after a Chinese agriculture delegation canceled a visit to Montana. The news on Friday had pulled Wall Street’s main indexes to their worst session in about two weeks.

“The latest negative news out of trade talks last week has brought a lot of uncertainty in the market. We are stuck in a trading range and the feeling is one of global disparity,” Cardillo said.

Perceived safe haven assets such as gold and the U.S. dollar had risen after the Chinese delegation scrapped its farm visit, reflecting a risk-off attitude in the market.

The so-called defensive sectors – consumer staples .SPLRCS and real estate .SPLRCR – were among the top gainers.

Other economic reports due in the final week of the third quarter include core personal consumption data – the Federal Reserve’s preferred inflation gauge – a final reading on second-quarter GDP data and the Conference Board’s consumer confidence reading for September.

At 11:31 a.m. ET, the Dow Jones Industrial Average .DJI was up 19.89 points, or 0.07%, at 26,954.96, the S&P 500 .SPX was up 1.44 points, or 0.05%, at 2,993.51. The Nasdaq Composite .IXIC was up 0.70 points, or 0.01%, at 8,118.38.

Apple Inc (AAPL.O) rose 0.5%, boosting the Nasdaq, after U.S. trade regulators approved 10 out of 15 requests for tariff exemptions by the iPhone maker.

Social network Facebook Inc (FB.O) fell 1.6% and was among the biggest drags on the S&P 500.

Boeing .BA.N edged lower after a Reuters report that European antitrust regulators were set to investigate the plane maker’s $4.75 billion bid for the commercial aircraft arm of Brazil-based Embraer SA (EMBR3.SA).

Additionally, the chief of the U.S. Federal Aviation Administration is set to detail progress on the Boeing 737 MAX aircraft to international air regulators, who are divided about returning the grounded jet to flight after two fatal crashes.

Juniper Networks Inc (JNPR.N) rose 1.3% as Needham upgraded the network gear maker’s stock to “buy”.

Advancing issues outnumbered decliners by a 1.15-to-1 ratio on the NYSE and for a 1.34-to-1 ratio on the Nasdaq.

The S&P index recorded 13 new 52-week highs and one new low, while the Nasdaq recorded 27 new highs and 34 new lows.

Source: https://www.reuters.com/article/us-usa-stocks/wall-street-subdued-on-mixed-pmi-u-s-china-trade-concerns-idUSKBN1W817U