There was a sell-off mood on Wall Street on Tuesday. Worries about the economy and doubts about the recent trade deals with China pushed the most important stock indices down to almost 4 percent. In particular, technology stocks were affected.
The leading index, Dow Jones Industrial, slipped 3.10 percent to 25,027.07 points. It was the biggest slide since October 10th. At the start of the week, the stock market had responded even more relieved that from January planned US tariffs on Chinese goods worth $ 200 billion for the time being 90 days to be suspended.
For the market-wide S & P 500, it fell on Tuesday by 3.24 percent to 2700.06 points down. The Nasdaq 100 technology index fell 3.78 percent to 6795.21 points.
US President Donald Trump and Chinese President Xi Jinping had agreed at the weekend that they would not further escalate the trade conflict. „Actually, the two sides would have to agree only on the parameters for a future deal and what must be included to extend the truce and to promote the lifting of tariffs,“ wrote analyst Craig Erlam of the currency broker Oanda. However, according to his colleague Stephen Innes, there is now some confusion after Trump’s advisor Larry Kudlow struggled to make it clear exactly when China wanted to take tariffs back on US cars.
London investors were also bothered by bad news: Just hours before the start of the five-day debate on the Brexit agreement, the British parliament had inflicted a severe defeat on the government. The deputies decided that the government disregarded the rights of the parliament. This is another setback for Prime Minister Theresa May. In any case, it will be granted only minor opportunities to reach a majority for their agreement in the planned vote in Parliament on 11 December.
Investors also looked nervously at the bond market. For the first time in eleven years, yields on three-year and two-year US bonds were higher than yields in the five-year maturity range. Such a structure with higher short-term rates than long-term rates is an unusual phenomenon and is considered a recession signal.
The Dow was lagged by the cyclically sensitive shares of construction equipment manufacturer Caterpillar with a minus of around 7 percent. Apple’s shares fell more than 4 percent. The British investment bank HSBC had canceled the buy recommendation for the papers of the iPhone manufacturer, since it lacked short-term course drivers. Also all other Dow values closed in the minus.
The Dollar General department store had lowered its earnings per share target, missing the average analyst estimate, slipping share prices down nearly 7 percent.
A skeptical analyst study sent the papers of the logistics companies Fedex and UPS on the decline: they lost a good 6 or more than 7 percent. Investors underestimated the risks of competition from the market entry of online retailer Amazon in the cargo business, it said.
Meanwhile, this Wednesday, Wall Street and Nasdaq will be closed in remembrance of ex-president George HW Bush, 41, president of the United States, who died on November 30.
The euro was last trading at $ 1,1342. The European Central Bank had set the reference rate at 1.1490 (Monday: 1.1332) dollars. The dollar was worth 0.8765 (0.8825) euros. Leading 10-year US government bonds gained 16/32 points to 101-27 / 32 points, yielding 2.910 percent.
(dpa / rt German)