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U.S. Stocks Remain Sharply Lower After Early Sell-Off

wallstreet sept05 03dec19 lt

After falling sharply early in the session, stocks continue to see significant weakness in mid-day trading on Tuesday. The major averages are adding to the losses posted in the previous session, pulling back further off their record highs.

Currently, the major averages are stuck firmly in negative territory. The Dow is down 397.68 points or 1.4 percent at 27,385.36, the Nasdaq is down 96.85 points or 1.1 percent at 8,471.14 and the S&P 500 is down 33.25 points or 1.1 percent at 3,080.62.

The sell-off on Wall Street comes amid renewed trade concerns after President Donald Trump suggested he might prefer to wait until after the 2020 elections to strike a trade deal with China.

Trump told reporters at a NATO summit in London there is no deadline to reach a trade deal, adding, "In some ways, I think it's better to wait until after the election."

"But they want to make a deal now, and we'll see whether or not the deal's going to be right; it's got to be right," Trump said.

Trump claimed a potential trade deal is only dependent on whether he wants to sign it, because the U.S. is "doing very well" and China is "having by far the worst year that they have had in 57 years."

The comments from the president added to rising trade concerns after his administration threatened to impose duties of up to 100 percent on $2.4 billion in French imports, including champagne and handbags.

The threat comes after the administration concluded France's new digital services tax discriminates against U.S. companies such as Google (GOOGL), Apple (AAPL), Facebook (FB), and Amazon (AMZN).

Sector News

Steel stocks have shown a substantial move to the downside amid renewed uncertainty about U.S.-China trade talks, dragging the NYSE Arca Steel Index down by 2.3 percent.

Significant weakness also remains visible among semiconductor stocks, with the Philadelphia Semiconductor Index tumbling by 2.3 percent to its lowest intraday level in a month.

The KBW Bank Index has also slumped by 2.3 percent, extending the pullback seen after it reached its highest intraday level in well over a year in early trading on Monday.

Transportation, computer hardware and oil service stocks are also seeing considerable weakness on the day, reflecting broad based selling pressure.

Meanwhile, gold stocks are among the few groups bucking the downtrend, with the NYSE Arca Gold Bugs Index surging up by 2.9 percent.

The rally by gold stocks comes amid a sharp increase by the price of the precious metal, as gold for February delivery is jumping $16.70 to $1,485.90 an ounce.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Tuesday. Japan's Nikkei 225 Index slid by 0.6 percent, while Australia's S&P/ASX 200 Index plunged by 2.2 percent.

Meanwhile, the major European markets turned in a mixed performance on the day. While the German DAX Index edged up by 0.2 percent, the French CAC 40 Index slumped by 1 percent and the U.K.'s FTSE 100 Index tumbled by 1.8 percent.

In the bond market, treasuries have moved sharply higher after trending lower over the past few sessions. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 13.9 basis points at 1.697 percent.

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