U.S. stocks closed modestly lower on Thursday after investors digested mixed headlines on the progress of trade negotiations, with reports saying that China had invited American negotiators to Beijing for face-to-face talks, even though the U.S. Congress passed a bill supporting protesters in Hong Kong late Wednesday.
How did the major benchmarks fare?
The Dow Jones Industrial Average DJIA, -0.20% fell 54.8 points, or 0.2%, to 27,766.29. The S&P 500 SPX, -0.16% retreated 4.92 points, or 0.2%, to 3,103.54. The Nasdaq Composite index COMP, -0.24% gave up 20.52 points, or 0.2%, to 8,506.21.
Thursday marked the third consecutive losing session for both the Dow and S&P 500, while the Nasdaq closed lower for the second day in a row. The Dow is on pace to end the week down 0.9%, the S&P 0.5% and the Nasdaq is on track to retreat 0.4%.
What drove the market?
Hopes for a U.S. - China trade deal were bolstered by reports China’s chief trade negotiator Liu He has invited his U.S. counterparts for more talks, The Wall Street Journal reported.
Separately, Liu voiced optimism over a phase-one trade deal at a dinner in Beijing, Bloomberg reported though Liu also said he was “confused” about trade demands by the U.S., but believes an agreement will be reached.
Losses for U.S. stocks Wednesday and weakness for Asian equities early Thursday came in part after Reuters reported that a first-step deal will be pushed into 2020. President Donald Trump had also countered with heightened demands on China.
U.S - China relations were also strained after both the U.S. Senate and House passed a Hong Kong human rights bill which may be signed by Trump Thursday. China regards the legislation as interference in its domestic politics.
“An escalation would certainly destabilize the outlook for the global economy, pushing the current trade skirmishes into a full scale trade war right up to sanctions,” noted Bill Blain of Shard Capital in London. But “the fact Alibaba chose Hong Kong over Shanghai for its successful secondary listing shows Hong Kong still has value as China’s financial centre and gateway – why risk alienating it further?”
In U.S. economic data, the U.S. Conference Board’s index of leading indicators fell for a third straight month, adding more evidence of slowing economy. Weekly jobless claims, meanwhile, were little changed at 227,000, reflecting an employment market that remains healthy..
“You can’t have a recession without job losses so the million dollar question is whether first time claims for jobless benefits will come back down over the next few weeks,” wrote Chris Rupkey, chief financial economist at MUFG.
Which stocks were in focus?
TD Ameritrade’s AMTD, +16.92% shares surged 16.9% after reports Charles Schwab SCHW, +7.33% may buy the company as early as Thursday. Charles Schwab stock rose 7.3%.
Shares of Macy’s. M, -2.33% fell 2.3% after the department store chain missed sales estimates for the third quarter and lowered guidance for the full year. The company has come under pressure after reports that it had experienced a data breach this week.
Xerox’s XRX, +1.02% board threatened to go to HP Inc’s HPQ, -0.25% shareholders if the company does not reconsider its acquisition bid, Xerox said in a letter to HP directors late Thursday. Shares of Xerox closed up 1% and HP’s stock fell 0.3%.
Shares of General Motors GM, -1.73% edged lower after the automaker said it would recall more than 640,000 pickup trucks. The company’s stock fell 1.7%
How did other markets trade?
U.S. Treasury yields edged higher, with the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.54% up around 3.5 basis points to 1.771%.
In commodities and precious metals, gold extended its drop after falling on Wednesday, with gold for December delivery GCZ19, +0.02% declining $10.60, or 0.7%, to settle at $1,463.60 an ounce on Comex. West Texas Intermediate crude for January delivery rose $1.57, or 2.8%, to settle at $58.58 a barrel on the New York Mercantile Exchange
The ICE U.S. Dollar Index DXY, -0.04% , representing a basket of the greenback’s trading rivals, rose 0.2%.
Meanwhile, the Stoxx Europe 600 SXXP, -0.40% closed up 0.4%. In Asia, stocks traded mixed; the China CSI 300 000300, +0.44% closed down 0.5%, Japan’s Nikkei 225 retreated 0.5% and Hong Kong’s Hang Seng fell 1.6%.