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Stocks open lower on Wall Street; Twitter sinks after hack

2 months 1 week 2 days ago Thursday, July 16 2020 Jul 16, 2020 July 16, 2020 8:52 AM July 16, 2020 in News
Source: Associated Press

NEW YORK (AP) — Stocks are opening broadly lower on Wall Street Thursday, extending weakness in overseas markets. The S&P 500 index gave up 0.6% in the early going, led by losses in technology companies. Twitter sank after a breach in its security allowed hackers to break into the accounts of technology moguls, politicians and other major figures. Bank of America also fell after reporting that its profits were chopped in half in the latest quarter as the bank set aside billions of dollars to cover potentially bad loans caused by the coronavirus pandemic. Treasury yields fell after climing the day before.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story appears below.

Shares retreated in Europe and Asia on Thursday as investors sold on worries Beijing might cut back on stimulus after China’s economy returned to growth in the last quarter.

The Shanghai Composite index led Thursday’s declines, dropping 4.5% to 3,210.10. Benchmarks also fell in Tokyo, Hong Kong and Sydney.

News that China’s economy grew 3.2% in annual terms in April-June, after a 6.8% contraction in the previous quarter, failed to keep an overnight rally going.

The expansion came as anti-virus lockdowns were lifted and factories and stores reopened. But it still was the weakest positive figure since China started reporting quarterly growth in the early 1990s.

Weak retail sales showed that boosting factory output is the easy part, said Stephen Innes of AxiCorp.

“No matter how much stimulus and fiscal sugar you try to entice consumers with, they will not leave their apartment and go on a spending spree until they feel confident the landscape is virus-free,” he said in a report.

The improved growth data was expected and provided an opportunity to cash in on profits from the recent run up in prices, analysts said.

Germany’s DAX skidded 0.7% to 12,836.17 while the CAC 40 in Paris also shed 0.7%, to 5,056.88. Britain’s FTSE 100 lost 0.8% to 6,244.06. New York looked set for a retreat, with the future contract for the S&P 500 down 0.7% while the contract for the Dow industrials declined 08%.

In Asian trading, Tokyo’s Nikkei 225 lost 0.8% to 22,770.36, while the Hang Seng in Hong Kong fell 2% to 24,970.69. In South Korea, the Kospi shed 0.8% to 2,183.76.

In Australia, the S&P/ASX 200 fell 0.7% to 6,010.90, as authorities reported that Victoria state had confirmed a record 317 new coronavirus cases in a day.

The Victoria government responded be reducing numbers of non-urgent surgeries allowed in hospitals to increase beds available for COVID-19 patients, Health Minister Jenny Mikakos said.

Shares had advanced worldwide on Wednesday after researchers announced that a vaccine developed by the National Institutes of Health and Moderna had revved up people’s immune systems in early testing, as hoped.

But rising numbers of infections and deaths from the COVID-19 pandemic remain a constant source of uncertainty.

Worries also remain high that the stock market has gone overboard in its rally: It has taken less than four months for the S&P 500 to almost return to its record after being down nearly 34%. But it could take years for the economy and corporate profits to get back to where they were before the pandemic struck.

A raft of troubling news, from the more than 13.5 million confirmed cases of COVID-19 to escalating friction between Washington and Beijing, hangs over the markets but has been countered by the massive amounts of stimulus poured into financial systems by central banks to counter the pandemic downturn.

“In most other realities, this would be ironic or absurd. But in the liquidity inundated post-COVID world markets, this is Thursday,” Mizuho Bank’s Riki Ogawa said in a commentary.

The yield on the 10-year Treasury slipped to 0.62% from 0.63% late Wednesday. It tends to move with investors’ expectations for the economy and inflation.

In other trading, benchmark U.S. crude oil shed 32 cents to $40.88 per barrel in electronic trading on the New York Mercantile Exchange. It rose 91 cents to settle at $41.20 per barrel on Wednesday.

Brent oil, the international standard, gave up 24 cents to $43.55 per barrel. It picked up 89 cents to settle at $43.79 per barrel overnight.

The dollar bought 106.90 Japanese yen, down from 106.96 yen late Wednesday. The euro was trading at $1.1404, weakening from $1.1411.

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