Off The Wire
Wall Street retreats ahead of Trump's response on Hong Kong
(Reuters) - Wall Street’s main indexes fell on Friday as investors were on edge ahead of a U.S. response to China’s national security law on Hong Kong that threatens to take the shine off another month of strong gains for the stock market.
President Donald Trump, who has warned of a tough response to China’s move, is expected to make an announcement later in the day.
Adding to the downbeat mood, economic data showed U.S. consumer spending suffered another month of record decline in April, buttressing expectations that the economy could contract in the second quarter at its steepest pace since the Great Depression.
“It is a pullback in front of what is likely to be pretty bipartisan, hawkish remarks from the President,” said Bob Shea, chief executive officer of TrimTabs Asset Management in New York.
“I’m not surprised and it’s happening at a time when markets are short term over bought, meaning due for some corrective action.”
Despite worsening relations between the world's two largest economies, expectations of a quick post-pandemic economic recovery have driven the S&P 500 .SPX about 37% higher from its March lows as it heads for its second straight month of gains.
The benchmark index is now about 11% below its Feb. 19 record high.
Financials .SPSY were the biggest drag on the benchmark index after posting their best performance among all major S&P sectors this week. All major sector indexes were also in the red.
At 11:16 a.m. ET, the Dow Jones Industrial Average .DJI was down 184.48 points, or 0.73%, at 25,216.16, the S&P 500 .SPX was down 14.97 points, or 0.49%, at 3,014.76. The Nasdaq Composite .IXIC was down 5.41 points, or 0.06%, at 9,363.58.
A day after Trump signed the order threatening social media firms with new regulations over free speech, Twitter Inc (TWTR.N) hid a tweet from the President and accused him of breaking its rules by “glorifying violence”.
Twitter shares were down 2.3% while Facebook Inc (FB.O) fell 0.4%.
Focus is also on Federal Reserve Chair Jerome Powell, who is speaking in a public webcast organized by Princeton University.
Salesforce.com Inc (CRM.N) slipped 4.2% as the cloud-based business software maker cut its annual revenue and profit forecasts.
Declining issues outnumbered advancers for a 1.97-to-1 ratio on the NYSE and for a 1.82-to-1 ratio on the Nasdaq.
The S&P index recorded six new 52-week highs and no new lows, while the Nasdaq recorded 30 new highs and 11 new lows.
Reporting by Medha Singh and Devik Jain in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva