Technology sector logs its worst single-day decline since late July
U.S. stocks closed mostly lower on Wednesday, 05 September 2018 with the technology sector logging its worst single-day decline since late July, triggering an outsize drop in the Nasdaq. The weakness in tech stocks came as Facebook and Twitter executives testified on Capitol Hill about online misinformation. Trade-related concerns also weighed on the market, with the U.S. and Canada set to restart high-stakes efforts to resolve differences as they work toward recasting the North American Free Trade Agreement.
The Dow Jones Industrial Average bucked the trend to edge up 22.51 points to 25,974.99. The S&P 500 index lost 8.12 points, or 0.3%, to 2,888.60, with the tech sector slumping 1.5%. The Nasdaq Composite Index fell 96.07 points, or 1.2%, to 7,995.17, finishing below the key 8,000 mark.
The uncertainty around trade has rattled investors, overshadowing U.S. economic data that have been healthy. The issue has undercut some confidence in stocks against the backdrop of a robust economy that suggests more upside for the market.
Investors are also monitoring a steady unraveling of emerging economies as the U.S. dollar, perceived as a source of safety in times of uncertainty, has strengthened amid the protracted trade spats.
Among economic reports expected for the day, the trade deficit jumped almost 10% in July, hitting the highest level in five months and keeping the U.S. on pace to record the largest annual gap in a decade.
Shares of Facebook slid 2.3% and Twitter sank 6.1%. Other notable tech movers included Google-parent Alphabet which fell 0.9%., and Microsoft Corp.which lost 2.9%. Amazon.com fell 2.2%. While the e-commerce giant is classified as a consumer-discretionary company, it often trades on technology-related trends. Netflix shed 6.2%.
Worries about tariff disputes, notably between the U.S. and its longstanding Canadian counterparts and clashes between Washington and Beijing, with China tariffs set to kick in this week, have unsettled investors. The outlook for emerging-market economies also have fostered a recent spate of anxiety on Wall Street. Major indexes tracking U.S. stocks were trading mostly lower Wednesday.
Commodities priced in dollars often trade inversely with the dollar, as moves in the U.S. unit can influence the attractiveness of those commodities to holders of other currencies. A measure of the buck's strength, the ICE U.S. Dollar Index was down 0.3% at 95.188 in Wednesday dealings. The index trades less than 0.1% higher this week thus far.
Bullion prices ended higher at Comex on Wednesday, 05 September 2018. Gold futures settled above $1,200 an ounce on Wednesday as worries about trade negotiations and weakness in the dollar helped to boost the metal's investment appeal.
December gold added $2.20, or 0.2%, to settle at $1,201.30 an ounce, after finishing Tuesday's session down 0.6%, settling beneath the psychological level at $1,200. December silver tacked on 4 cents, or 0.3%, to $14.22 an ounce, after closing Tuesday with a 2.6% loss.
Crude oil prices settled lower on Wednesday, 05 September 2018. Prices settled at their lowest levels in about a week as a major storm that passed through the Gulf of Mexico missed the bulk of the oil and natural-gas operations in the region.
October West Texas Intermediate crude on the New York Mercantile Exchange CLV8, -0.13% the U.S. oil benchmark, fell $1.15, or nearly 1.7%, to settle at $68.72 a barrel, the lowest for the contract in just over a week. November Brent, the global benchmark, settled at $77.27 a barrel, down 90 cents, or almost 1.2%, on the ICE Futures Europe exchange. It marked the lowest finish since last Wednesday.
Expectations that Gordon would become a hurricane as it made landfall Tuesday had triggered a surge in oil prices on Tuesday, with Brent briefly nearing the $80-a-barrel threshold.
Looking ahead, investors will receive several pieces of economic data on Thursday, including the August ADP Employment Change report, the revised readings for Q2 Productivity and Unit Labor Costs, the weekly Initial Claims report, July Factory Orders, and the August ISM Services Index.
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