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U.S. Stocks Drift Amid Muddied Trade Messages: Markets Wrap

  • Ten-year Treasury yields narrow; European equities decline
  •  Oil trims weekly advance as dollar climbs for a fifth day

WT24 Desk

U.S. equities drifted after President Donald Trump said the U.S. hasn’t agreed to a tariff rollback with China, dimming hopes for a preliminary trade deal next month, Bloomberg reports.

The S&P 500 Index ticked lower Friday after notching record highs in the previous session on trade optimism. Financial and energy shares led decliners, while health-care and media companies advanced as Walt Disney Co. saw gains after solid earnings. Treasury yields narrowed, while gold pared losses and oil declined. The dollar gained.

Investors have been whipsawed the past two days amid an onslaught of contradictory headlines about progress toward an interim deal in the trade war. American and Chinese officials both said Thursday that a phase-one agreement would feature pledges to roll back tariffs on each others’ goods in phases, but Trump’s statements today may throw cold water on hopes that the dispute will be resolved anytime soon.

“People have to put things in perspective a little bit. It’s been a very, very nice week overall,” JJ Kinahan, chief market strategist at TD Ameritrade, said by phone. “That being said, I’m also not getting excited about the good news we had earlier this week only because it’s great to see progress but we still don’t any pen to paper. Until we do, anything’s possible.”

Food and financial companies weighed on the Stoxx Europe 600 Index. China’s exports declined less than expected in October as optimism rose about an interim trade deal, though imports contracted for a sixth straight month. The offshore yuan edged lower though stayed stronger than 7 per dollar.

Elsewhere, an early rally for Asian stocks fizzled, leaving most shares down in the region. Hong Kong equities were among the worst performing after the death of student protester threatened to inflame demonstrations planned for this weekend. Japanese 10-year government bond yields climbed alongside their Australian peers.

Here are the main moves in markets:

Stocks
The S&P 500 Index fell 0.1% to 3,081.65 as of 11:30 a.m. New York time, the largest fall in a week.
The Stoxx Europe 600 Index fell 0.4% to 404.84, the first retreat in more than a week and the biggest fall in a week.
Germany’s DAX Index sank 0.4% to 13,232.46, the first retreat in more than a week and the largest decrease in a month.
The MSCI Emerging Market Index sank 0.8% to 1,065.17, the biggest dip in five weeks.
Currencies
The Bloomberg Dollar Spot Index advanced 0.2% to 1,204.22, hitting the highest in more than three weeks with its fifth straight advance.
The euro dipped 0.3% to $1.102, reaching the weakest in four weeks on its fifth consecutive decline.
The British pound decreased 0.2% to $1.2786, hitting the weakest in more than three weeks with its fifth consecutive decline.
The Japanese yen strengthened 0.1% to 109.13 per dollar.
The offshore yuan weakened 0.4% to 6.9959 per dollar, the largest decrease in a month.
Bonds
The yield on 10-year Treasuries fell one basis point to 1.90%.
The yield on two-year Treasuries fell two basis points to 1.65%, the largest fall in a week.
Germany’s 10-year yield fell three basis points to -0.27%, the biggest fall in a week.
Britain’s 10-year yield declined one basis point to 0.783%.
Commodities
West Texas Intermediate crude fell 1.2% to $56.62 a barrel.
Gold depreciated 0.1% to $1,467.64 an ounce, the weakest in more than three months.

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