BCN-12 US stocks drop on trade tensions

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BCN-12

US-STOCKS-MARKETS-OPEN

US stocks drop on trade tensions

NEW YORK, May 7, 2019 (BSS/AFP) – Wall Street stocks dropped again early
Tuesday as the latest flare-up in US-China trade tensions dampened hopes for
a speedy resolution to the months-long fight.

About 15 minutes into trading, the Dow Jones Industrial Average had lost
1.0 percent to 26,172.42.

The broad-based S&P 500 fell 1.1 percent to 2,900.19, while the tech-rich
Nasdaq Composite Index declined 1.2 percent to 8,029.78

Hopes that Beijing and Washington could seal a trade deal took a hit over
the weekend when President Donald Trump threatened to raise tariffs on
Chinese imports as of Friday.

Stocks fell sharply early Monday, although they recovered much of the
declines later in the day as investors viewed Trump’s remarks as part of a
bargaining strategy.

That cautious optimism evaporated late Monday, when US Trade Representative
Robert Lighthizer accused China of reneging on past commitments in the
lengthy talks, and confirmed tariffs already in place would more than double
to 25 percent Friday.

The renewed tensions raised speculation Beijing would cancel this week’s
talks, however, officials in China said Vice Premier Liu He would indeed make
the trip.

But the dust-up has shaken market confidence in the inevitability of a
deal.

“The stock market will go down big, and stay down for a while, if a trade
deal with China falls by the wayside and higher tariff rates become
entrenched,” said analyst Patrick O’Hare in a note on Briefing.com.

“The rebound off yesterday’s lows was proof that the market isn’t expecting
that to be the outcome.”

Anadarko Petroleum advanced 0.2 percent after announcing that it favored a
higher bid from Occidental Petroleum to its deal with Chevron. Anadarko said
it would cancel the Chevron bid, although it signaled it would also consider
another bid from Chevron.

Occidental rose 0.4 percent, while Chevron shed 1.2 percent.

BSS/AFP/SR/2000 HRS