Wall St. stalls as global worries trounce materials stocks
Wall Street`s major indexes failed to make much progress on Tuesday as investors, worried about global growth prospects, fled from materials and industrials stocks.
The International Monetary Fund cut global economic growth forecasts for 2018 and 2019, and its 2019 estimates for U.S. and China, saying the two countries would feel the brunt of the impact of their trade war next year.
President Donald Trump also repeated a threat to impose tariffs on $267 billion worth of additional Chinese imports if Beijing retaliates to Washington`s recent levies.
The materials index was down more than 3 percent, on track for its biggest one-day percentage drop since February 8. Its biggest drags were from chemical companies after PPG Industries fell 9.4 percent following a warning late on Monday that its current-quarter profit would be hit by higher raw material costs and softer demand in China.
"If industrials and materials are weighed on because of concerns about global activity, it`s going to cast a pall over the market at large since S&P 500 companies generate about half of their business from overseas markets," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
At 3:03PM ET, the Dow Jones Industrial Average was up 12.84 points, or 0.05 percent, to 26,499.62, the S&P 500 gained 2.97 points, or 0.10 percent, to 2,887.4 and the Nasdaq Composite added 20.68 points, or 0.27 percent, to 7,756.63.
Along with chemicals companies, paper packaging stocks such as WestRock and Packaging Corp of America, which both fell 8 percent, after BMO flagged the risk of rising industry supply.
The trade-sensitive industrials sector was down 1 percent, with Caterpillar falling 2.2 percent and airline stocks down 2.6 percent.
American Airlines fell 6 percent after the company said fuel prices were higher than expected in the third quarter, raising concerns that rising fares were not enough to offset energy costs.
The energy index was the S&P`s biggest gainer, with a 1.1 percent jump as oil prices rose on growing evidence of falling Iranian crude exports and a partial Gulf of Mexico production shutdown due to Hurricane Michael. [O/R]
Advancing issues outnumbered declining ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favoured decliners.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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