US stocks fall led by technology shares | IFCM
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US stocks fall led by technology shares - 18.8.2017

All three major US stock indices fall more than one percent

US stocks retreated on Thursday as investor confidence was undermined by concerns about President Donald Trump's ability to push pro-growth reforms and news of a terrorist attack in Barcelona. The dollar inched higher: the live dollar index data show the ICE US Dollar index, a measure of the dollar’s strength against a basket of six rival currencies, rose 0.2% to 93.676. Dow Jones industrial average lost 1.2% closing at 21750.73 dragged by 4% drop in Cisco as the networking hardware company lowered its guidance for next quarters. The S&P 500 fell 1.5% settling at 2430.01 led by technology stocks, down 2%. The Nasdaq index dropped 1.9% to 6221.91.

Questions about President Trump's ability to secure sufficient support for pushing pro-growth reforms like tax cuts and infrastructure spending programs after prominent business executives’ criticism of his reaction to a white-supremacist rally added to concerns about high stock valuations. Economic data were mixed: initial jobless claims and the Philadelphia Fed Index came in better than expected, while industrial production data missed expectations. Industrial production grew 0.2% on the month in July, below expectations of a 0.3% increase.

Bank stocks lead European markets lower

European stock indices ended lower on Thursday snapping a three day winning streak dragged lower by bank shares. Both euro and British Pound extended losses against the dollar. The Stoxx Europe 600 closed 0.6% lower. Germany’s DAX 30 lost 0.5% closing at 12203.46. France’s CAC 40 fell 0.6% and UK’s FTSE 100 ended 0.6% lower at 7387.87. Indices opened 0.7% - 1% lower today.

Bank shares fell after Fed minutes showed central bank officials were concerned about recent slowing of inflation, raising the likelihood the Fed may not hike interest rates again this year. This lowers the earnings outlook for many euro-zone banks which have operations in the US and lower interest rates negatively affect their net interest margins. The euro fell after European Central Bank July meeting minutes showed policy makers decided not to make even a slight change to forward guidance as they believe inflation is still considerably low from central bank’s target 2% rate. The July headline inflation came in unchanged at 1.3%.

Asian markets down

Asian stock indices are mostly lower today. Nikkei lost 1.2% to 19470.41 as yen continued the rise against the dollar. Chinese stocks are mixed: the Shanghai Composite Index is up less than 0.1% as data showed growth in new home prices slowed in July, Hong Kong’s Hang Seng Index is 0.7% lower. Australia’s All Ordinaries Index is down 0.5% as the Australian dollar resumed the rise against the greenback..

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Oil advances

Oil futures prices are extending previous day’s gains. Prices ended higher on Thursday as attention shifted to biggest weekly drop in US crude oil inventories in 11 months despite domestic output hitting the highest level in more than two years. Brent for October settlement rose 1.5% to end the session at $51.03 a barrel on the London-based ICE Futures exchange.

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