U.S. Stocks, Bond Yields Fall Amid Trade Tensions
23 May 2019 - 3:37PM
Dow Jones News
By Will Horner
The Dow Jones Industrial Average fell more than 300 points in
early trading Thursday after the latest flare-up in trade tensions
battered shares of technology companies and sent investors seeking
the safety of U.S. Treasurys.
The blue-chip index dropped 345 points or 1.3%, to 25421 soon
after the opening bell, while the S&P 500 declined 1%. The
Nasdaq Composite was also trading lower, falling 1.5%.
Trade tensions continued to plague stocks after a Chinese
official said the U.S. should "adjust its wrong actions" if it
would like to continue negotiations, according to a CNBC. The
strong rhetoric follows a number of barbs between U.S. and Chinese
officials since trade talks broke down earlier this month, and
deepened investors' unease that the situation will be tough to
resolve.
Shares of technology companies continued to suffer some of the
heaviest losses. Those firms in the S&P 500 fell 1.7%,
extending their losses so far this month to more than 7%.
Investors, meanwhile, sought the safety of government bonds.
Yields on 10-year U.S. government bonds, which fall as prices
rise, hit a 52-week low of 2.356%. The yield on 10-year German
government bonds fell further into negative territory and were last
at -0.104%.
Mixed messages on the trade issue made it hard for investors to
settle on a likely outcome, said Geoffrey Yu, head of the U.K.
Investment Office at UBS Wealth Management.
"Investors may have trouble focusing on too many narratives at
once. Right now, tensions between the U.S. and its major trading
partners continue to drive stock market volatility," Mr. Yu
said.
Investors were also weighing the latest meeting minutes from the
Federal Reserve, which reinforced the view that the central bank
will leave interest rates unchanged for now. The meeting took place
before the recent flare-up in trade tensions.
In Europe, the Stoxx Europe 600 dropped 1.2% by afternoon
trading, with all sectors of the pan-continental index falling into
the red. In Asia, markets were broadly lower. The Shanghai
Composite slipped 1.4%, Hong Kong's Hang Seng traded 1.6% lower and
Japan's Nikkei lost 0.6%.
--Michael Wursthorn contributed to this article
(END) Dow Jones Newswires
May 23, 2019 10:22 ET (14:22 GMT)
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