U.S. stocks were lower Tuesday morning as investors shunned assets viewed as risky following weak China international trade data for July.
Bank shares were also in focus after Moody’s Investors Service said it may downgrade its credit ratings on six major U.S. banks.
How are stock-index futures trading
- The Dow Jones Industrial Average DJIA dropped 286 points, or 0.8%, to 35,187.
- The S&P 500 SPX was off 33 points, or 0.7%, at 4,4486.
- The Nasdaq Composite COMP shed 1 points, or 0.8%, to 13, 882.
The Dow rose 408 points, or 1.2%, on Monday, while the S&P 500 SPX gained 0.9% and the Nasdaq advanced 0.6%.
What’s driving markets
A risk-off tone swept global markets after weak China trade data heightened concerns about a slowing global economy.
China’s exports fell 14.5% for the year to July, the biggest decline since the outbreak of the COVID-19 pandemic in February 2020, while imports slid 12.4%, worse than forecast.
The news highlighted “that the world’s second biggest economy is being dragged lower by weakness in global demand and a domestic slowdown,” said Jim Reid, strategist at Deutsche Bank.
Assets sensitive to China demand were hit, with industrial commodities like crude oil CL.1, -1.15% and copper HG00, -2.15% lower. Shares in London-listed miners were under pressure.
Perceived havens were firmer, with the dollar DXY gaining ground and government bonds attracting buyers, pushing Treasury yields BX:TMUBMUSD10Y lower.
Also weighing on sentiment was a possible downgrade by Moody’s of six major U.S. banks, adding to concerns about the fragility of the financial sector as it deals with the sharp rise interest rates since March 2022.
Meanwhile, the second quarter earnings reporting season continues, with UPS UPS, -2.20%, Barrick Gold GOLD, -1.28%, Eli Lilly LLY, +15.99% and Under Armour UAA, +1.49% before the bell, and Super Micro Computer SMCI, -1.49% and Lyft LYFT, +2.10% after the close among those presenting their numbers.
Data showed the U.S. trade deficit narrowed by 4.1% to $65.5 billion in July.
Philadelphia Fed President Patrick Harker said policy makers “may be at the point where we can be patient and hold rates steady.
Companies in focus
- Paramount Global shares PARA, -0.50% edged down 0.5% as the media company’s adjusted earnings beat expectations and as it agreed to sell Simon & Schuster for $1.6 billion to KKR.
- Beyond Meat Inc. BYND, -21.50% shares tumbled 15.7% following an earnings report that included a 30% drop in revenue year-over-year for the struggling maker of plant-based meat items.
- Eli Lilly & Co. LLY, +15.99% shares shot up 12.9%, after the drug giant reported second-quarter profit and revenue that climbed above expectations and provided a big boost its full-year outlook, as results were helped by the $579 million received from the sale of rights for Baqsimi.
- United Parcel Service Inc. UPS, -2.20% shares dropped 1.9%, after the package delivery giant reported second-quarter revenue that fell short of expectations and cut its full-year outlook, citing the volume impact from labor negotiations.
- Billionaire Charlie Ergen is combining his two telecom companies, pay-TV provider Dish Network Corp. DISH, +4.97% and satellite-communications company EchoStar Corp. SATS, -3.40% in an all-stock deal, the companies said Tuesday, confirming an earlier report by The Wall Street Journal. Dish shares rose 3.1%, while EchoStar dropped 5.1%.
This article was originally published by Marketwatch.com. Read the original article here.
