U.S. stocks finished lower to continue last week’s slide, giving up early gains, as a Bloomberg report stated that the U.S. is planning to add tariffs to additional Chinese goods if upcoming talks are not productive added to trade concerns, and in spite of Dow member IBM’s $34 billion agreement to acquire Red Hat. Treasury yields and the U.S. dollar are gaining ground, while crude oil and gold prices are dipping as concerns on whether economic and earnings growth has peaked remained. Personal income and spending data came in mixed and growth in regional manufacturing output unexpectedly accelerated. Asia finished mixed and Europe was broadly higher.
At 4:02 p.m. ET, the Dow Jones Industrial Average fell 1.0%, the S&P 500 Index retreated 0.6%, and the NASDAQ Composite is lost 1.6%. WTI crude oil is decreased $1.02 to $66.56 per barrel, Brent crude oil was down $0.74 at $76.61per barrel, and wholesale gasoline is flat at $1.81 per gallon. The Bloomberg gold spot price is decreasing $4.68 to $1,228.84 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—is up 0.2% to 96.59.
Personal income rose 0.2% month-over-month (m/m) in September, versus the Bloomberg forecast of a 0.4% gain, and compared to August’s upwardly-revised 0.4% rise. Personal spending gained 0.4%, in line with estimates, and following August’s favorably-revised 0.5% rise. The September savings rate as a percentage of disposable income was 6.2%. The PCE Deflator was up 0.1% m/m, matching expectations and the prior month’s unrevised rise. Compared to last year, the deflator was 2.0% higher, in line with estimates and versus August’s unrevised 2.2% increase. Excluding food and energy, the PCE Core Index was up 0.2% m/m, above expectations of a 0.1% rise and the prior month’s unrevised flat reading. The index was 2.0% higher y/y, matching estimates and August’s unrevised rise.
The Dallas Fed Manufacturing Activity Index unexpectedly showed growth accelerated in October, rising to 29.4 from September’s unrevised 28.1 level, where it was expected to remain, with a reading above zero denoting expansion.
Treasuries are lower, with the yield on the 2-year note were flat at 2.81%, while the yields on the 10-year note gained 1 basis point (bp) to 3.08% and the 30-year bond gained 2 bps to 3.33%. The U.S. dollar gained ground.
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