US Stocks fall on trade war angst

The US stocks finished session lower on Wednesday, 20 November 2019, amid uncertainty over the outlook for key trade talks between two major economies and renewed tension between the US and China over legislation supporting Hong Kong protesters. At closing bell, the Dow Jones Industrial Average declined 112.93 points, or 0.4%, to 27,821.09, while the S&P 500 index shed 11.72 points, or 0.38%, to 3,108.46. The Nasdaq Composite sank 43.93 points, or 0.51%, to 8,526.73.

Investors concerns that trade talks between the world's two biggest economies could hit a snag, after Beijing condemned a US Senate measure backing anti-government protesters in the Asian financial hub. In a statement, China's foreign ministry said the United States should stop interfering in Hong Kong and Chinese affairs and move to stop the latest bills on Hong Kong from becoming law. China condemned the passage of a bill by the US Senate aimed at protecting human rights in Hong Kong, amid clashes between pro-democracy protesters and police.

 

Conflicting signals from Washington and Beijing in the past few days deflated market hopes of a truce soon to end their damaging tariff war. Completion of an initial trade deal could slide into next year, as Beijing presses for more extensive tariff rollbacks, and the Trump administration counters with heightened demands of its own. President Donald Trump said on Tuesday that the United States would raise tariffs on Chinese imports if no deal is reached with Beijing.. A tariff hike on Chinese exports to the U.S. is set to kick in on Dec. 15.

Traders were also keeping an eye on the impeachment proceedings in Washington as the uncertainty around them could hinder Trump's negotiating position with China.

Technology stocks took the heaviest losses. Communication services and industrial stocks also were big losers. Banks fell as bond yields declined. Energy stocks notched the biggest gains as crude oil prices rebounded.

ECONOMIC NEWS: Policy Could Change If Developments Emerged That Led To A Material Reassessment Of Economic Outlook, Says Fed Minutes -- Minutes from the Federal Reserve's monetary policy meeting held in late October were released on Wednesday but did not provide much further insight into the outlook for interest rates. Interest rates are already widely expected to remain unchanged in the near future after the Fed's statement and congressional testimony by Fed Chairman Jerome Powell.

The minutes said the decision to remove the "act as appropriate" language from the statement was seen as consistent with the view that the current stance of monetary policy was likely to remain appropriate as long as the economy performed broadly in line with the Fed's expectations. The Fed also reiterated that policy is not on a preset course and could change if developments emerged that led to a material reassessment of the economic outlook.

Reiterating the assessment in the Fed's statement, the minutes said members noted that information received since the September meeting indicated that the labor market remained strong and that economic activity had been rising at a moderate rate.

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