How major USA stock indexes fared Tuesday Asia News

Kenny Grant
December 7, 2018

Small-company stocks fell more than the rest of the market. Ten-year yields are below 3 percent.

Technology companies, banks and industrial stocks accounted for much of the broad sell-off.

However, no joint statement from the US and Chinese trade teams was issued after the leaders of the world's two largest economies met on Saturday on the sidelines of the G-20.

The Dow Jones Industrial Average fell 73.87 points, or 0.29 per cent, at the open to 25,752.56.

The trade-sensitive industrial sector .SPLRCI fell 4.4 percent, with Boeing BA.N and Caterpillar CAT.N declining 4.9 percent and 6.9 percent, respectively. The Russell 2000 index gave up 68.21 points, or 4.4 percent, to 1,480.75.

The focus now is on the spread between the two-year and 10-year yields, currently at its narrowest in over a decade and whose inversion has preceded the past three United States recessions. Japan's Nikkei 225 index gave up 2.4 per cent and the Kospi in South Korea lost 0.8 per cent. Hong Kong's Hang Seng added 0.3 per cent.

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Moreover, the USA is advising the countries to bare from using Huawei apparatus to introduce new telecommunication technologies. Michael Antonelli, a trader at Wisconsin-based investment bank RW Baird, said: 'Everything feels out of control right now'.

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It said that Canada, at the request of the USA , had arrested a Chinese citizen " not violating any American or Canadian law ". It surpassed Apple in smartphone sales in the second quarter of this year, leaving it behind only market leader Samsung.

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Arab separatists and the militant Islamic State (IS) group both claimed the assault. No militant group immediately took responsibility for the attack.

The S&P 500 .SPX posted its biggest single-day percentage drop in about two months, giving back some gains from Monday and a week earlier, when the benchmark index tallied its largest weekly percentage gain in almost seven years. -China trade talks. The inversion of a portion of the Treasury yield curve for the first time since 2007 reinforced the impression that markets are approaching the end of the current cycle.

The sharp turn in the markets followed a strong rally on Monday fueled by optimism over the news that President Donald Trump and his Chinese counterpart Xi Jinping had agreed at the G-20 summit over the weekend to a temporary, 90-day stand-down in the two nations' escalating trade dispute.

FED WATCH: Markets got jolt from remarks by the president of the Fed's NY regional bank. "It will always be the best way to max out our economic power". That seemed to counter Fed Chairman Jay Powell's remarks last week.

The jitters helped drive demand for government bonds Tuesday, pushing prices higher.

The U.S. bond markets also triggered the major sell off yesterday as benchmark 10-year notes sat at 2.91% and 2-year notes quoted at 2.79%, taking the gap between the pair to around 11.5 basis points, marginally higher than yesterday's 9.5 basis point low but still the smallest in more than a decade, according to The Street. The slide in bond yields, which affect interest rates on mortgages and other consumer loans, weighed on bank stocks. The Organization for Economic Cooperation and Development forecast that global growth would slow from 3.7 percent this year to 3.5 percent in 2019 and 2020.

Brent crude, the global standard, added 0.6 percent to close at $62.08 per barrel in London. The euro strengthened to $1.1349 from $1.1342. Germany's DAX lost 1.1 percent, while France's CAC 40 dropped 0.8 percent.

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