Off The Wire
Wall Street drops; White House considers delisting Chinese companies
NEW YORK (Reuters) - U.S. stocks fell on Friday after news that the Trump administration was considering delisting Chinese companies from U.S. stock exchanges and limit U.S. investments into China.
The tariff-sensitive Philadelphia semiconductor index .SOX extended its decline to 2.7%. The index was already under pressure from Micron Technology Inc’s (MU.O) tumble after it forecast a disappointing first-quarter profit.
High-level trade talks between Washington and Beijing are scheduled for next month before the start of the third-quarter earnings season.
“If our policies spark a major sell off in Shanghai where that creates problems for China that could negatively impact the trade negotiations which are supposed to start on Oct. 10. That is where the U.S. based fear would come from,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.
Adding to the negative momentum, the S&P 500 index fell below its 50-day moving average in afternoon trading.
At 2:55PM ET, the Dow Jones Industrial Average .DJI fell 162.36 points, or 0.6%, to 26,728.76, the S&P 500 .SPX lost 30.49 points, or 1.02%, to 2,947.13 and the Nasdaq Composite .IXIC dropped 136.58 points, or 1.7%, to 7,894.08.
The three main indexes are set to end lower in a volatile week, which included U.S. Democrats launching an impeachment investigation on President Donald Trump.
Data earlier showed U.S. consumer spending barely rose in August, suggesting that the economy’s main growth engine was slowing after accelerating sharply in the second quarter.
Declining issues outnumbered advancing ones on the NYSE by a 1.77-to-1 ratio; on Nasdaq, a 2.05-to-1 ratio favored decliners.
The S&P 500 posted 11 new 52-week highs and 6 new lows; the Nasdaq Composite recorded 26 new highs and 104 new lows.
Additional reporting by Ambar Warrick and Medha Singh in Bengaluru; Editing by Shounak Dasgupta and Chizu Nomiyama