US close: Wall Street mixed as investors look towards nonfarms
Wall Street ended Wednesday on a mixed note, as investors reacted to news that the White House's chief economic advisor, Gary Cohn, has resigned, reigniting fears of a trade war.
Dow Jones I.A.
38,486.26
04:30 15/10/20
Nasdaq 100
17,466.65
07:30 23/04/24
The Dow Jones Industrial Average finished down 0.33% at 24,801.36 and the S&P 500 lost 0.05% to 2,726.80, while the Nasdaq 100 managed gains of 0.24% to close at 6,929.39.
Cohn, an advocate of free trade widely seen as a calming influence on Trump, quit over the president's decision to impose tariffs on steel and aluminium imports.
“The implication is that without the restraining influence of Cohn on Trump, the president will now have a free hand to press ahead with further tariffs and generally up the ante on trade,” noted Neil Wilson, senior market analyst at ETX Capital.
“Clearly he fought back on trade and lost.
“This in itself does not bode well for risk despite that small boost we saw on news that North Korea could consider de-nuking.”
According to a Bloomberg report, Trump's administration was considering a wide range of import tariffs on Chinese goods from shoes and clothing to consumer electronics, and a clampdown on Chinese investments in the US.
The European Union responded to Trump's plans on Wednesday, with commissioner for trade Cecilia Malmstrom saying that the EU was working hard to ensure any tariffs imposed to comply with WTO rules.
“We have made it clear that a move that hurts the EU and puts thousands of European jobs in jeopardy will be met with a firm and proportionate response,” said Malmstrom on Twitter.
She added to that at a press conference, saying that the EU was discussing which US products would be hit with tariffs if Trump goes ahead with his plans.
Higher import duties on bourbon whisky, peanut butter, cranberries, orange juice, steel, and industrial products were reportedly being considered.
On the data front, the ADP employment report - widely seen as a precursor to the important non-farm payrolls report on Friday - showed that private-sector employment remained robust throughout February.
Employers added 235,000 staff, beating economists' expectations for an increase of 205,000, making February the fourth month in a row of job gains topping 200,000 or higher.
Separately, the Commerce Department reported that the US trade deficit increased to a near decade high in January, with the country's shortfall with China widening sharply.
That was seen as indicative that Trump's so-called ‘America First’ trade policies were unlikely to have any real impact on the deficit, with the president continuing to claim the United States was being taken advantage of by its trading partners.
Commerce revealed that the trade gap had jumped a further 5% to $56.6bn in January - the highest level since October 2008 - exceeding economists' expectations of an increase to $55.1bn, partly due to commodity price increases.
Lastly, productivity - a measure of the goods and services Americans produced on an hourly basis - was flat in the fourth quarter of 2017, according to the Labour Department.
That replaced the agency's prior estimate of a 0.1% decline for non-farm business productivity.
In corporate news, shares of accounting and tax specialist chain H&R Block were ahead 11.49% after the company posted a bigger-than-expected third-quarter loss on Tuesday, while offbeat fashion play Urban Outfitters eked out gains of 0.24% by the end of the session, on the back of its fourth-quarter earnings a day earlier.
Elsewhere, technology company Inovalon was ahead 2.42% as it announced the acquisition of Ability Network for $1.2bn.