Amazon blames Trump for ‘improper’ pressure in losing $10 billion pentagon contract
U.S. stocks ended lower Monday, with the Dow notching a 105 point decline, as investors kept a close eye on trade negotiations ahead of Sunday’s tariff deadline and policy updates from global central banks.
How did major benchmarks perform?
The Dow Jones Industrial Average DJIA, -0.38% retreated 105.46 points, or 0.4%, at 27,909.60, while the S&P 500 index SPX, -0.32% lost 9.95 points, or 0.3%, at 3,135.96 and the Nasdaq Composite Index COMP, -0.40% shed 34.70 points, or 0.4%, at 8,621.83.
Despite Monday’s losses that snapped a three-day winning streak, all three benchmarks were less than 1% of their closing highs, set on Nov. 27.
What drove the market?
Traders awaited monetary-policy updates from the Federal Reserve, starting on Tuesday, and from new European Central Bank on Thursday, with investors hoping to gather clues on the state of the global economy and the longer-term outlook for interest rates.
But on Monday, the state of U.S.-China talks loomed large, given a Dec. 15 deadline for 15% import duties on $156 billion of annual consumer imports. Some experts, however, have speculated that the President Donald Trump may delay implementing tariffs as the parties work toward a lasting detente.
“There is a lot of uncertainty heading into Dec. 15 about what the president is going to do,” said Robert Pavlik, chief market strategist at SlateStone Wealth, in an interview with MarketWatch. But he also pointed out that “people are not running for the hills.”
“If you saw all of the more defensive areas of market were leading today, that would give you a different message that people are worried and moving to the sidelines,” Pavlik said.
On Friday, anxious stock-market investors shook off tariff concerns to focus on the strength of the U.S. labor market. The U.S. economy created 266,000 new jobs in November, the Labor Department reported, marking the biggest gain since January, signaling job growth remains robust even though economic growth has slowed.
“The recession fears that pervaded much of the year are fading, replaced by a sense that economic indicators are bottoming,” wrote JPMorgan & Co. analysts in their 2020 equity outlook released on Monday.
The analysts also said they anticipate no further trade-war escalation ahead of next year’s U.S. presidential race and “a synchronized global recovery” to take hold instead, while stressing that the current slowdown is only a “third intra-cycle reset” that “will not mark an end to this cycle.”
Meanwhile, economic reports out of China indicate that trade tensions have hurt the world’s second-largest economy, as China’s exports unexpectedly dropped 1.1% in November from a year earlier, while shipments to the U.S. fell 23%, data from the General Administration of Customs showed over the weekend.
China’s commerce ministry on Monday said Beijing hopes trade negotiations with the U.S. will result in a “satisfactory” outcome soon, according to reports.
In other trade developments, Trump and House Democrats reached a tentative deal over a rewrite of the U.S.-Mexico-Canada trade deal, a priority for the President, per an Associated Press report.
Which stocks were in focus?
Tesla Inc. TSLA, +1.08% gained 1.1% even as reports indicated that a Tesla Model 3 on autopilot crashed into two vehicles — one of them belonging to the Connecticut State Police.
Shares of Chevron Corp. CVX, -0.60% fell 0.6% Monday after Citi analyst Alastair Syme downgraded the stock to neutral from buy.
Shares of Merck & Co. Inc. MRK, -0.15% were in focus after the pharmaceutical company said it would buy ArQule Inc. ARQL, +103.88% in a deal worth $2.7 billion. Merck shares fell 0.2%, while ArQule’s stock rallied 104%.
UnitedHealth Group Inc. UNH, -0.95% subsidiary OptumRx’s is acquiring Diplomat Pharmacy Inc. DPLO, -32.70% for $4 a share, the companies said Monday, well below Friday’s closing price of $5.81. Diplomat shares were down 32.7% Monday at $3.91, while UnitedHealth declined 1%.
Sanofi SA shares SNY, -1.59% edged lower on Monday after the French pharmaceutical company said that it will acquire biotechnology company Synthorx Inc. THOR, +170.52% for an aggregated equity value of around $2.5 billion. U.S.-listed shares of Sanofi fell 1.6%, while those for Synthorx soared 171%.
Shares of Amazon.com Inc. AMZ, +0.56% ended 0.1% lower after the e-commerce and cloud-computing giant said President Trump’s “improper pressure” and behind-the-scenes attacks harmed its chances of winning a $10 billion Pentagon contract.
How did other markets fare?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.14% edged 1.3 basis points lower to 1.829% on weak economic data out of China.
West Texas Intermediate crude for January delivery CLF22, +1.20% on the New York Mercantile Exchange fell 18 cents, or 0.3%, to settle at $59.02 a barrel, on global growth concerns after gaining 7.3% gain last week, according to Dow Jones Market Data.
Gold prices settled slightly lower Monday as traders awaited a midweek policy update from the Federal Reserve. February gold GCG20, +0.01% on Comex lost 20 cents, or 0.01% at $1,464.90 an ounce, after the yellow metal shed 1.2% on Friday and fell 0.5% last week, according to FactSet data.
The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, -0.02%, declined less than 0.1%, at 97.640, against a basket of a half-dozen currency peers. The index lost 0.6% last week.
European stocks ended slightly lower, with the Stoxx 600 Europe index SXXP, -0.24% closing down 0.2% at 406.39.
In Asia overnight Friday, the Hang Seng HSI, -0.05% finished little-changed, the China CSI 300 000300, +0.03% fell 0.2%, while the Shanghai Composite Index SHCOMP, +0.05% gained about 0.1%. Japan’s Nikkei 225 NIK, -0.01% rose 0.3%.