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BUSINESS Tuesday 6 augusT 2019
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Stocks around the world slide as trade war worsens

By STAN CHOE the United States that ac-
DAMIAN J. TROISE counts for more than 10%
Associated Press of its sales. Chip stocks were
NEW YORK (AP) — Stocks also among the hardest hit
tanked again Monday in the S&P 500, and Nvidia
on worries that President sank 6.5%.
Donald Trump’s worsening Monday’s plunge in bond
trade war will threaten a yields dragged on banks
global recession and drag by making lending less
profits for companies even profitable. Bank of Ameri-
lower. ca fell 4.8%, Citigroup lost
China let its currency, the 3.2% and JPMorgan Chase
yuan, drop to its lowest lev- dropped 2.9%.
el against the dollar in more Companies are in the final
than a decade, a move stretch of the latest round
that Trump railed against as of quarterly earnings re-
“currency manipulation.” ports, and results haven’t
It followed his own tweets been as bad as initially
last week that threatened feared, though still down
tariffs on about $300 billion from year-ago levels. Profit
of Chinese goods, which for companies in the S&P
would extend tariffs across 500 is now expected to
almost all Chinese imports. Specialist James Denaro, left, works at his post on the floor of the New York Stock Exchange, contract by roughly 1%.
The escalating trade war Monday, Aug. 5, 2019. That’s better than the near-
between the world’s larg- Associated Press ly 3% drop earlier expected.
est economies is rattling highs just over a week ago. merely a reflection of its ready pulled back on their More than three quarters of
investors already unnerved But the escalating trade own slowing economy and investment given all the the S&P 500 have reported
about a slowing global tensions and disappoint- the painful effects of tariffs. uncertainties about trade financial results.
economy, falling U.S. cor- ment that the Federal Re- The latest round of tar- and the global economy. There are still several big-
porate profits and possibly serve has not committed iffs threatened by Trump Technology stocks bore the name companies that
too-weak inflation. to a lengthy series of inter- would much more directly brunt of Monday’s selling, have yet to report financial
“The Great China Trade est-rate cuts have sent the hit U.S. consumers buying and Apple slid 4.7%. It not results. Disney will report on
Deal evaporated before S&P 500 on a losing streak clothes and electronics only depends on Chinese Tuesday, while CVS and
our eyes last week and in- set to hit its sixth day, which made in China. Earlier tar- factories to assemble its Lyft are set to report on
vestors should stop hop- would be its longest since iffs more heavily affected iPhones, but China is also Wednesday. Uber will re-
ing it back into existence,” October. businesses, which have al- the only country aside from lease results on Thursday. q
Christopher Smart, head of The S&P 500 is 5.3% below
the Barings Investments In- A weaker yuan gives Chi- Survey: US services sector slips to worst
its record.
stitute, wrote in a report.
manufacturers
a
Losses were steep and nese
worldwide as a sell-off that boost by making their prod- growth in 3 years
began Monday in Asia ucts cheaper on worldwide
swept westward through markets for buyers using By JOSH BOAK
Europe to the Americas. dollars or other currencies. Associated Press
Investors in search of safety That hurts U.S. manufactur- WASHINGTON (AP) — The
herded into U.S. govern- ers, which have already pace of expansion for U.S.
ment bonds, which sent been hit by the slowing services companies fell to
yields plunging lower. global economy. It also its slowest pace in nearly
The yield on the 10-year adds more downward three years, as gauges of
Treasury note, which rises pressure on inflation, which business activity and new
with expectations of stron- some economists worry orders weakened.
ger economic growth and may be edging toward too The Institute for Supply
inflation, fell to its lowest weak. In the worst case, Management, an associa-
level since Trump’s 2016 falling prices encourage tion of purchasing manag-
election energized mar- people and companies to ers, said Monday that its
kets, down to 1.75% from hold off on buying things, non-manufacturing index
1.85% late Friday. which starts a vicious cycle fell to 53.7 from 55.1 in June. In this Dec. 27, 2018, file photo a worker trims fronds from a palm
The S&P 500 lost 2.4%, as of less and less economic The July measure was the tree in the Los Feliz section of Los Angeles.
of 12:17 p.m. Eastern time, activity. weakest since August 2016. Associated Press
and was on track for its The U.S. has long com- Readings above 50 signal proved. “We’re seeing this period,” he said.
worst day in nearly three plained about the weak- growth, so the index sug- easing, this slowing,” said The index comes from a
months. The Dow Jones ness of China’s curren- gests that overall growth Anthony Nieves, chair of survey of businesses. Some
Industrial Average fell 605 cy, and Monday’s drop will continue but has down- the ISM’s non-manufactur- of the respondents said
points, or 2.3%, to 25,880, brought the yuan past a shifted. The services sec- ing business survey com- that tariffs against China
and the Nasdaq compos- level that traders saw as an tor accounts for the bulk mittee. Nieves said that a launched by President
ite dropped 3.1%. important psychological of U.S. jobs and economic slowdown can occur dur- Donald Trump have com-
The U.S. economy is still benchmark, at seven per activity. ing the summer months, plicated their businesses,
growing, the unemploy- $1. The index’s measures of but the survey indicates a challenge that could
ment rate remains close to Analysts were mixed, business activity and new that the decade-plus ex- increase if the administra-
its healthiest level in nearly though, on whether the orders decreased, though pansion will continue. tion expands these im-
half a century and U.S. move was a result of China both still pointed to growth. “I don’t think we’re any- port taxes as planned in
stock indexes set record weaponizing the yuan or The hiring measure im- where near a recessionary September.q