Renewed Trade Concerns Contribute To Pullback On Wall Street - U.S. Commentary

(RTTNews) - Stocks fluctuated over the course of the trading session on Thursday before ending the day mostly lower. With the drop on the day, the Nasdaq and the S&P 500 pulled back off the record closing highs set in the previous session.

The major averages ended the day in negative territory but off their lows of the session. The Dow slid 137.65 points or 0.5 percent to 25,986.92, the Nasdaq fell 21.32 points or 0.3 percent to 8,088.36 and the S&P 500 dropped 12.91 points or 0.4 percent to 2,901.13.

The lower close on Wall Street came after a report from Bloomberg said President Donald Trump intends to move ahead with plans to impose tariffs on $200 billion in Chinese imports as early as next week.

Citing people familiar with the matter, Bloomberg said Trump intends to impose the tariffs after a public comment period ends next Thursday, September 6th.

Bloomberg noted some of the people cautioned that Trump hasn't made his final decision and may enact the tariffs in installments.

The pullback by stocks may also have reflected profit taking following the strength seen in recent sessions, which lifted the Nasdaq and the S&P 500 to record highs.

Uncertainty about trade talks between the U.S. and Canada also weighed on the markets ahead of a Friday deadline to reach a deal.

On the U.S. economic front, the Labor Department released a report showing a modest uptick in initial jobless claims in the week ended August 25th.

The report said initial jobless claims crept up to 213,000, an increase of 3,000 from the previous week's unrevised level of 210,000. Economists had expected jobless claims to edge up to 214,000.

A separate report released by the Commerce Department showed personal income and spending both increased in line with economist estimates in the month of July.

The Commerce Department said personal income rose by 0.3 percent in July after climbing by 0.4 percent in June. The increase in income matched expectations.

The report also said personal spending climbed by 0.4 percent in July, matching the increase in the previous month as well as economist estimates.

Sector News

Reflecting renewed concerns about trade, steel stocks saw substantial weakness on the day, dragging the NYSE Arca Steel Index down by 2.8 percent.

Gold stocks also moved sharply lower over the course of the session, resulting in a 1.8 percent slump by the NYSE Arca Gold Bugs Index.

The weakness among gold stocks came amid a decrease by the price of the precious metal, with gold for December delivery sliding $6.50 to $1,205 an ounce.

Telecom, chemical, and oil service stocks also saw notable weakness on the day, moving lower along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Thursday. China's Shanghai Composite Index tumbled by 1.1 percent, while Hong Kong's Hang Seng Index slid by 0.9 percent. However, Japan's Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent.

The major European markets all moved to the downside on the day. While the U.K.'s FTSE 100 Index fell by 0.6 percent, the German DAX Index and the French CAC 40 Index dropped by 0.5 percent and 0.4 percent, respectively.

In the bond market, treasuries moved moderately higher after ending the previous session roughly flat. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dipped by 2.4 basis points to 2.860 percent.

Looking Ahead

Developments regarding trade may impact on the markets on Friday as U.S. and Canadian officials seek to reach an agreement on an overhaul of NAFTA before the end-of-the-week deadline imposed by Trump.

Traders are also likely to keep an eye on U.S. economic reports on Chicago-area business activity and consumer sentiment.