Page 25 - ARUBA TODAY

BUSINESS Wednesday 4 september 2019
A25

Stocks slump broadly as expanded US-China tariffs kick in

By ALEX VEIGA said Tuesday that its manu-
Associated Press facturing index slid to 49.1
Technology companies last month, from 51.2 in July.
drove a broad slide in U.S. Any reading below 50 sig-
stocks Tuesday as disap- nals a contraction. That’s
pointing economic data the lowest for the index
and the latest escalation in since January 2016.
the trade war between the A global softening in de-
U.S. and China put investors mand, worsened by the
in a selling mood. increasingly high-risk trade
The Dow Jones Industrial war between the U.S. and
Average slumped more China, appears to be hurt-
than 350 points as the mar- ing American manufac-
ket gave back some of its turers. More than half of
gains from last week. The the public comments from
S&P 500 snapped a string companies surveyed by
of four straight weekly de- ISM pointed to economic
clines last week, but still uncertainty as a drag on
ended August with its first their businesses.
monthly loss since May. Investors have been wor-
The sell-off came as mar- ried that the trade war and
kets opened after a long a slowing global economy
weekend to expanded tar- In this Aug. 23, 2019, file photo pedestrians pass the New York Stock Exchange in New York. could tip the U.S. into a re-
iffs between Washington Associated Press cession. The bond market
and Beijing. On Sunday, the 2.8%. Oil prices dropped ing data stoked fears of an lingering trade war has has been reflecting these
U.S. started charging a 15% 2.6%, dragging down share economic slowdown. Fac- been expected since early fears, with long-term bond
tariff on about $112 billion prices for energy stocks. tory activity in the U.S. last August when the U.S. an- yields falling below short-
of Chinese products. China Chevron slid 1.7%. month fell short of econo- nounced plans for the new term ones, a so-called
responded by charging Investors fled to safer hold- mists’ forecasts and shrank tariff measures, prompting inversion in the U.S. yield
tariffs of 10% and 5% on a ings, including utility stocks, for the first time since Au- China to retaliate. The wors- curve that has correctly
list of American goods. bonds and gold. gust 2016. Businesses are in- ening trade situation be- predicted previous reces-
Technology companies Utilities held up well, as did creasingly wary of investing tween the world’s two larg- sions. The yield on the 10-
accounted for much of the with makers of consumer and expanding because of est economies dragged year Treasury has been
decline. The sector is par- products such as Procter uncertainty surrounding the the S&P 500 to its second hovering near or below that
ticularly sensitive to swings & Gamble, which added U.S.-China trade dispute. monthly loss of the year in of the 2-year Treasury yield,
in trade relations with Chi- 0.8%. The price of gold KEEPING SCORE: The S&P August and dented inves- which on Tuesday dropped
na and tariffs have the climbed 1.8%. Gold pro- 500 was down 1% as of tors’ confidence in global to 1.46% from 1.49% late Fri-
potential to drive up costs ducer Newmont Goldcorp 2:03 p.m. Eastern Time. The economic growth. day.
for gadget and chipmak- also gained 1.8%. Dow Jones Industrial Aver- The U.S. and China are BRITAIN AND BORIS: Euro-
ers. Apple, which relies on Bond prices rose, sending age fell 368 points, or 1.4%, supposed to meet in Sep- pean stocks fell and the
China as a key part of its yields lower. The yield on to 26,034. The Nasdaq fell tember to continue trade British pound dropped to its
supply chain, fell 2%, while the 10-year Treasury fell to 1.3%. Smaller company negotiations, but investors lowest level against the U.S.
chipmaker Nvidia dropped 1.46% from 1.50% late Fri- stocks also fell sharply, have grown pessimistic that dollar in 34 years, exclud-
2.1%. Industrial stocks were day. The lower bond yields sending the Russell 2000 in- any resolution will be forth- ing a brief “flash crash” in
among the biggest de- weighed on banks. Bank of dex down 1.8%. coming in the near future. 2016 that may have been
cliners. Caterpillar, which America lost 2.5%. Major indexes in Europe fell ECONOMIC RED FLAG: The caused by technical glitch-
is seen as an industry bell- The surge in demand for U.S. broadly. Institute for Supply Man- es, as the U.K. faces a po-
wether when it comes to government bonds came TRADE WAR EXPANDS: The agement, an association tentially chaotic exit from
the impact of trade, fell as new U.S. manufactur- latest escalation in the of purchasing managers, the European Union. q

Restrictions on hard currency take effect in Argentina.

By ALMUDENA CALATRAVA be brought into the com- government imposed the ahead of the conservative
Associated Press pany within five days of the measures after a first stage incumbent, scaring many
BUENOS AIRES, Argentina time they are paid. Import- of voting showed the left- investors and sending the
(AP) — Restrictions on ac- ers also need permission to leaning presidential candi- country’s currency and
cess to dollars took effect make payments. date Alberto Fernández far stock market plunging.q
in Argentina on Monday It also bars people from
as the government tries to buying dollars to pay do-
control a rapid loss of for- mestic debts. The mea-
eign reserves and an ac- sures are far less restrictive
celerating devalution of than those imposed by
the currency. the government of former
The measure says resi- President Cristina Fernán-
dents can’t buy more than dez, which restricted even
$10,000 a month without spending on vacations
permission from the Cen- abroad and taxed credit
tral Bank. Institutions need card transactions in dollars,
permission for lesser sums. leading to the rise of a cur-
It also says that dollars rency black market.
earned for exports should President Mauricio Macri’s