Weak consumer confidence pulls stocks lower

NEW YORK (AP) — U.S. stocks fell in midday trading Tuesday as a weak consumer confidence report smothered investor confidence ahead of upcoming U.S.-China trade negotiations.

The market initially sprang forward following U.S. Treasury Secretary Steven Mnuchin's confirmation that trade negotiations will resume the week of Oct.7. Stocks quickly pulled back however after a report showed that consumer confidence fell sharply in September, in large part because of the economically damaging trade war and uncertainty over its resolution.

Technology stocks reversed course from their opening and led the decline by midday. Chipmaker Intel fell 1.2% and Qualcomm fell 1.7%. The sector is particularly sensitive to trade war developments as many companies rely on China for sales and supply chains.

Energy stocks were among the biggest losers as crude oil prices dipped. Schlumberger fell 1.2% and Halliburton fell 2.7%.

Investors shifted money into consumer product makers and utilities. Both those sectors moved higher as they are typically considered safer places to shift money when economic growth is uncertain.

Bonds rose and pushed yields lower in another sign that investors were becoming more cautious following the weak consumer confidence data. The yield on the 10-year Treasury slipped to 1.66% from 1.7% late Monday.

Banks, including Citigroup, slid on the lower bond yields. The lower yields hamper a bank's ability to raise interest rates on loans.

KEEPING SCORE: The S&P 500 index fell 0.3% as of noon Eastern time. The Dow Jones Industrial Average fell 38 points, or 0.1%, to 26,914 The Nasdaq fell 0.8%.

OVERSEAS: Stocks in Asia edged higher. China's central bank governor said policy will stay "stable and healthy," suggesting there are no plans to cut interest rates to help stimulate economic growth.

European stocks were mixed. A slowdown in economic growth and Britain's planned Oct. 31 exit from the European Union continue weighing on investors. The Ifo institute's latest report shows that German business confidence has picked up slightly after a five-month decline, but managers are more pessimistic about their outlook for the next half-year.

LACKING CONFIDENCE: The Conference Board, a business research group, reported that its consumer confidence index fell to 125.1 in September from a revised reading of 134.2 in August. The measure is important because consumers have been the key support for the U.S. economic expansion even as the trade war hurts manufacturing.

Analysts have been worried that a slide in confidence could mean an eventual drop in consumer spending and an erosion of economic growth.

STOCKS LOSING STEAM: The market has become weaker as September nears its end. Stocks are on track for another weekly loss as investor ease up following weeks of gains.

The S&P 500 notched a 2.8% gain the first week of September, but then pulled back to a 1.8% and 1% gain the following weeks. It fell 0.5% last week and is headed for a slight loss so far this week.

The U.S.-China trade war and the uncertainty it is producing has been the main cause of concern for investors. Both sides have pulled back somewhat recently from a series of escalating tariffs and other measures. Still, investors are cautious, considering that previous negotiations have failed to produce a deal.

BUSTED TIRE: AutoZone fell 4.4% after the auto parts retailer's fiscal fourth quarter sales fell shy of Wall Street forecasts.

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