US close: Stocks stage epic rally to bounce back from session lows
US stocks saved themselves from some serious losses on Thursday, joining the global selloff earlier in the session but recovering somewhat to see the Dow close just 79 points lower.
At the close, the Dow Jones was 0.32% lower at 24,947.67 and the S&P 500 was 0.15% weaker at 2,695.95, while the Nasdaq managed to bounce back from earlier losses to end the day 0.42% higher at 7,188.26.
Wall Street initially joined in the bloodbath seen across the pond, with London's FTSE 100 closing 3.15% lower at 6,704.05, its lowest level since December 2016, while Europe's benchmark Stoxx 600 index was 3.09% weaker at 343.31 but, the Dow, which had shed as much as 785 points during the session was bolstered by a report released late in the day that said Fed officials had chosen to adopt a wait-and-see mentality after a likely interest-rate increase at their meeting in December.
Worries about a trade war were back at the forefront of investors' minds after Meng Wanzhou, the CFO of Chinese telecoms company Huawei was arrested in Canada over the weekend.
Wanzhou now faces extradition to the US over possible violations of sanctions against Iran. China has urged both Canada and the US to "rectify wrongdoing".
"Traders have quickly moved out of riskier assets reflecting nerves that the arrest is likely to escalate tensions between the US and China once again," said London Capital Group analyst Jasper Lawler.
"Relations between the US and China were supposed to be on the mend after a productive G20. However, the arrest has the potential to shatter very fragile US-Sino relations which will weigh further on global trade and growth concerns."
Elsewhere, oil prices slipped, with West Texas Intermediate down 2.19% at $51.73 a barrel and Brent crude 2.03% weaker at $60.31 after Saudi Arabia's energy minister dashed hopes of any steep production cuts at the OPEC meeting in Vienna.
Khalid Al-Falih told reporters that no agreement had been reached yet on a production cut and suggested that reducing output by one million barrels a day would be sufficient.
Lawler said: "With concerns that Trump could be running the show behind the scenes following its support for Saudi Arabia in the face of Khashoggi's murder and Trump's well-known desire for low oil prices, Saudi Arabia is caught between a rock and a hard place. Not ideal, particularly given the rising concerns over lagging demand from slowing global growth."
The 10-year treasury note was yielding 2.984% at the end of the session on Thursday, after trading at 2.92% on Tuesday, and the USD was down 0.39% against the GBP at 0.7822.
In corporate news, clothing and home decor retailer Lands' End closed 15.54% lower after the release of its third-quarter results.
Costco shares were up 3.03% at the end of the session after topping same-store sales forecasts, while Apple had lost 1.11% amid China woes.
On the data front, private sector employment in the US rose less than expected in November, according to data released by the ADP on Thursday.
Employers added 179,000 jobs versus expectations for a 195,000 increase. Meanwhile, October's total was revised down from 227,000 to 225,000.
Small businesses with fewer than 50 employees added 46,000 jobs, while medium-sized businesses with between 50 and 499 employees created an extra 119,000 jobs. Large companies with 500 or more employees recruited an extra 13,000 people.
Still on the topic of unemployment, one of the most-closely tracked indicators of conditions in the US jobs market came in just a tad worse-than-expected on Thursday, nevertheless, some economists expressed concern.
According to the Department of Labor, initial jobless claims for the week ending on 1 December dipped by 4,000 to reach 231,000 (consensus: 230,000), while the prior week's reading was revised up marginally, by 1,000 to 234,000.
The four-week moving average, which aims to smooth out the fluctuations in the data from one week to the next, did jump by 4,250 to 228,000.
In other news, America's trade shortfall with the rest of the world widened a tad in October on the back of stronger import demand.
According to the Department of Commerce, the US foreign trade deficit grew by 1.7% month-on-month in October to reach -$55.5bn, versus -$54.6bn for September.
Dragging the trade balance further into the red was a $900m increase in the goods deficit to $78.1bn, as overseas sales of soybeans declined by $800m.
The services surplus meanwhile narrowed by $100m to $22.6bn.
Elsewhere, factory orders dropped 2.1% in October - in line with expectations on the Street - as manufacturers continued to increase production despite a softening level of business investment since the summer.
September was revised down to a 0.02% reading from its previous 0.07% mark.
Lastly, the Institute for Supply Management revealed that its non-manufacturing index rose to a seasonally adjusted 60.7% in November, up from the 60.3% recorded in October to the second-strongest reading in 13 years.
A similar gauge, the IHS Markit US services PMI, fell to 54.7 in November from the 54.8 seen in October, with new-order growth slumping to a 13-month low.