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Wall Street extends losses after tumultuous week
NEW YORK, Sept 21, 2019 (BSS/AFP) – US stocks sank on Friday, closing the
week in the red after an abruptly canceled visit by Chinese officials spooked
investors on Wall Street.
With no apparent explanation, Chinese agricultural officials on Friday
scrapped hastily planned trips to farms in Montana and Nebraska and instead
returned to China.
The news heightened fears that talks to resolve the US-China trade war
could be heading south.
However, the US Trade Representative’s office said Friday that trade talks
were continuing.
The benchmark Dow Jones Industrial Average erased gains from earlier in
the day, closing down 0.6 percent at 26,935.07, leaving the index down one
percent for the week.
Meanwhile, the S&P 500 fell 0.5 percent to 2,992.07, falling below the
3,000-point threshold for the first time since Monday.
The tech-heavy Nasdaq lost 0.8 percent, closing at 8,117.67.
All three indexes posted weekly losses after three straight weeks of
gains.
“An awful lot to absorb this week for the market,” Quincy Krosby of
Prudential Financial told AFP.
Stocks had suffered a wild ride since Monday, when markets reacted to
soaring oil prices after devastating attacks on Saudi oil facilities
temporarily knocked half the country’s production capacity offline.
Markets were ultimately unimpressed by the US Federal Reserve’s decision
on Wednesday to cut interest rates by 25 basis points, as had been widely
expected.
Central bankers also aired the differences on Friday as to whether and by
how much the Fed should have cut interest rates this week, laying bare the
sharp disagreements among policymakers.
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Meanwhile, the New York Federal Reserve Bank took emergency steps to
prevent banks from running out of the cash they need to meet minimum reserve
requirements — the first such moves since the great financial crisis in
2008.
And the New York Fed announced it would continue doing so for another
three weeks.
Krosby said the Chinese officials’ early departure raised eyebrows among
investors given Trump’s remarks on Friday.
“The president came out with comments he does not want a trade deal before
the election. That said, they are still going to the high level meeting in
October” said Krosby.
“But we are again on the on-off relationship between the US and China.”
In money markets, there were signs that a liquidity crunch was beginning
to ease as demand for cash fell during Friday’s repo operations conducted by
the New York Federal Reserve.
Apple fell 1.5 percent performing worse than the market on the day it
launched sales of the latest iPhone.
Fast food giant McDonald’s also fell 0.6 percent despite announcing
increased dividends.
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