Stocks on Wall Street slip as tensions over the US-China’s trade war resurfaced.
Stocks on Wall Street slipped as tensions over the US-China’s trade war resurfaced.
Tariff-sensitive companies were among the biggest decliners in the S&P 500. Aerospace-parts maker Arconic lost 3.8% while Illinois Tool Works fell 1.7% and tool manufacturer Stanley Black & Decker shed 1.7%.
The losses offset a 1.1% rally in the S&P 500 energy sector, which made its biggest one-day gain since July as oil prices soared to their highest close in nearly four years.
Exxon Mobil rose 1.6%, while France's Total gained nearly 1% in a fifth straight session of gains.
Supply fears have risen since the decision by Opec members and major producers such as Russia to hold off increases in output.
“The supply issues are real,” Macro Risk Advisors chief energy strategist Chris Kettenmann says. “The US-Iran economic sanctions are only compounding the fact that buyers need to look elsewhere for delivery of barrels.”
Global benchmark Brent futures rose 2.6% to $US80.83 a barrel while US crude jumped 2.1% to $US72.28 a barrel.
Dow drops 181 points
On Wall Street, stocks slumped after China pulled out of further trade talks with the US after a new round of tariffs on Chinese goods took effect.
The Dow Jones Industrial Average fell 181.45 points, or 0.7%, to 26,562.05. The S&P 500 dropped 0.35% to 2919.37, while the Nasdaq Composite rose 0.08% to 7993.25.
Later this week, attention will turn to the US Federal Reserve, which is expected to raise its benchmark rate by a quarter percentage point when it concludes its September meeting on Wednesday.
“We don’t think there’ll be a dovish surprise coming out of the meeting,” Fidelity International markets research analyst Ian Samson says.
The yield on the benchmark 10-year US Treasury note rose to 3.078% compared with 3.068% on Friday.
Corporate activity affected the gold mining, broadcasting and fashion industries.
Barrick Gold, the world’s largest, agreed to buy Randgold Resources in an all-share deal worth $US6 billion. Barrick shares rose 6.5% and Randgold added 7.6%.
Barrick shareholders will own 67% of the combined company, which will become dominant in African production.
US satellite broadcaster Sirius XM Holdings agreed to buy online music service Pandora for $US3b in another all-stock deal that will have a market value of $US30b. Sirius shares fell 8.8%.
Sirius will provide financial resources to Pandora as it competes with on-demand music-streaming rivals Spotify and Apple Music.
Pandora has 70 million monthly active users while Sirius has 36 million paying subscribers in the US and Canada, plus some 23 million more annual trial listeners who get the service for a period for free when they buy a car.
US fashion house Michael Kors is close to a deal to buy Italy’s Gianni Versace for €2b that will give the New York business a major foothold in Europe.
Versace's sales have stagnated in recent years, giving Michael Kors a significant turnaround project. It will also be one of the first attempts by an American fashion company to run an elite European brand.
Versace’s revenue was €700 million in 2017, delivering a profit of €15m last year. Its edgy fashion is at the opposite end of the spectrum from the Michael Kors aesthetic of classic American sportswear. Michael Kors investors panned the deal, sending the shares down 7.5%.
Mergers and acquisitions also drove European markets, with Sky shares rising 8.7% after Comcast outbid 21st Century Fox to buy the European pay-TV giant. In the US, Comcast shares fell 6.2%.
The Stoxx Europe 600 slipped 0.6% as declines in shares of automakers and construction firms offset a rally in the energy sector.
France’s CAC 40 eased 0.3%, Germany’s DAX slipped 0.6% and the UK’s FTSE 100 dropped 0.4%.
In Asia, Hong Kong’s Hang Seng slumped 1.6% after rising 2.4% last week.
