US open: Heavy losses at the bell as investors digest a slew of data
Wall Street trading began with heavy losses on Wednesday as investors waded through a sea of economic data, while also keeping a keen eye US/Turkey developments .
At 1550 BST, the Dow Jones Industrial Average was down 1.10% to 25,022.72, while the S&P 500 had lost 1.11% to 2,807.62 and the Nasdaq had moved 1.55% weaker to 7,748.73.
"The US index couldn't withstand the onslaught of negativity brewed during the European session, falling 280 points as the bell rang on Wall Street. The Dow is now in serious danger of dropping below 25,000, something that hasn’t happed in almost 4 weeks," said SpreadEx analyst Connor Campbell.
The Turkish lira was gaining ground against the dollar after the country announced that it will implement retaliatory tariffs on a range of US products including autos, tobacco and alcohol.
CMC Markets analyst Michael Hewson said the move was "unlikely to be well received by the US administration as they attempt to secure the release of their citizen. President Trump's reaction could well come by way of tweet later today".
The two countries are locked in a spat over US pastor Andrew Brunson who was arrested almost two years ago and accused of plotting against the Turkish government.
"Turkish President Erdogan appears to be playing a dangerous game if he thinks he can come out on top in this spat with the US. Notwithstanding the fact that tariffs are always inflationary they will only increase the concerns of Turkish business who want the central bank to start getting to grips with the runaway inflation in the Turkish economy," he added.
In corporate news, electric car maker Tesla was down 2.88% following a Bloomberg report that chief executive Elon Musk had not officially hired Goldman Sachs as its financial adviser when he tweeted his plans to take the company private last week and said he had secured deal funding.
Elsewhere, MoviePass owner Helios & Matheson Analytics tumbled 21% at the open after it reported a wider loss for the second quarter.
Shares in department store Macy's fell despite posting same-store sales that beat estimates and boosting its earnings and sales guidance. Macy's 12% drop, its biggest in over a year, was seen by some as yet another indicator that retailers were still facing much scrutiny on Wall Street as consumers flock to e-commerce.
On a data-heavy day, the NY Empire State manufacturing index ticked up in August as business conditions in the area unexpectedly picked up, according to a survey conducted by the New York Fed.
The Empire State manufacturing index rose to 25.6 from 22.6 in July, beating expectations for a reading of 20.0. The survey found that 42% of respondents reported an improvement in conditions over the month while 16% reported a worsening.
Retail sales in the US rose a tad more strongly than expected in July, boosted by sales at department stores and for clothing.
Total US retail sales volumes jumped by 0.5% month-on-month in July to reach $507.53bn, according to the Department of Commerce, much better than the 0.1% rise that economists had penciled-in, but was offset by a downwards revision of three tenths of a percentage point to June's reading, which was marked down to 0.2%.
US industrial production edged only a tad higher last month, although the output of business equipment remained strong as mining activity cooled a tad.
Total production increased by 0.1% month-on-month, according to the Federal Reserve and was up by 4.2% in comparison to a year ago, short of the 0.4% rise for July which economists had been expecting.
Elsewhere, US business inventories barely rose in June and the inventory-to-sales ratio fell to a three and a half year low, suggesting businesses would need to ramp up the accumulation of stock, which would, in turn, boost economic growth in the third quarter.
The Commerce Department said that business inventories had edged up 0.1% after a downwardly revised 0.3% increase in May.
Lastly, the National Association of Home Builders revealed a modest deterioration in US homebuilder confidence throughout August.
The NAHB/Wells Fargo Housing Market Index slipped to 67 from the 68 recorded a month earlier, matching estimates by economists.
"The good news is the builders continue to report strong demand for new housing, fueled by steady job and income growth along with rising household formations," said NAHB chairman Randy Noel.