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Tuesday 20th March 2018

After Choppy Start US Stocks Recover Amid Ailing Global Economy

Business

7Dnews London

Thu, 08 Aug 2019 10:12 GMT

A plunge in treasury bond yields raised worries over the weakening global economy, as Wall Street stocks recovered from a bruising start in the stock market, AFP reported on Wednesday August 7th.

US stocks increased gradually throughout the day after a painful start to finish little changed, while Treasury yields recovered. Two of the three major indices finished in positive territory.

According to CFRA strategist Lindsey Bell, the prolonged dispute between the US and China is putting the global economy at risk in different regions, citing the decision taken by Asian central banks to cut interest rates and weak German data. She added that stocks should not be abandoned at this time and stated that near-term recession is unlikely.

Whereas, the Dow Jones Industrial Average finished at 26,007.07, down 0.1% but more than 560 points above its session low and the broad-based S&P 500 added 0.1% at 2,883.98, around the same time, the tech-rich Nasdaq Composite Index gained 0.4% to 7,862.83.

US President Donald Trump's latest tariffs on China and China's response, have caused an unease that had replaced the earlier optimism created by the Federal Reserve interest rate cut, which subsequently placed the US stock under pressure.

Banking shares were big losers as the weakening US interest rate outlook crimps the profit outlook. JPMorgan Chase, Wells Fargo and Bank of America all lost around 2% or more.

Disney also had a bad day, losing 4.9% of its value after missing earnings forecasts. However, the pharmaceutical CVS Health shot up 7.5% as the pharmacy chain lifted its profit forecasts. The results also lifted rival Walgreens Boots Alliance, which gained 2.0%, according to AFP.


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