NEW YORK: Wall Street stocks finished decisively lower on Monday (Nov 28) on worries about China’s zero-Covid policy and caution ahead of key US economic data.
Unhappiness over China’s strict Covid-19 restrictions has sparked a wave of nationwide protests not seen since pro-democracy rallies in 1989 were crushed, and security forces have since filled the streets of cities like Beijing and Shanghai.
The unrest erupted after months of mounting frustration over tough coronavirus restrictions, pointing to public division over a hardline stance that has slowed the world's second-biggest economy.
“The market seems to be focused on China’s zero-Covid policy and not a whole lot else,” said Art Hogan, analyst at B. Riley Financial.
He said investors are also waiting for key US employment and consumer pricing data later in the week, alongside a public appearance by Federal Reserve Chair Jerome Powell that will offer clues on whether a hoped-for moderation in monetary policy is in the cards.
The Dow Jones Industrial Average fell 497.57 points, or 1.45%, to 33,849.46, the S&P 500 lost 62.17 points, or 1.54%, to 3,963.95 and the Nasdaq Composite dropped 176.86 points, or 1.58%, to 11,049.50.
With two trading days left in November, the S&P 500 is on track for a gain of 2.4% for the month.
After last week’s advance, US indices were in the red the entire day, finishing near session lows.
Among individual firms, shares of tech giant Apple lost 2.6% and weighed heavily on the S&P 500 as worker unrest at the world’s biggest iPhone factory in China fanned fears of a deeper hit to the already constrained production of higher-end phones.
.US shares of Pinduoduo Inc surged 12.6% after the Chinese e-commerce platform beat estimates for third-quarter revenue, helped by Covid-related lockdowns in the country that forced consumers to shop online. ISshares of other Chinese technology companies also rose, with Baidu and Tencent Holdings each gaining over 2%.
Shares of cryptocurrency and blockchain-related companies Coinbase Global Inc, Riot Blockchain Inc and Marathon Digital Holdings Inc each fell about 4% following lender BlockFi's bankruptcy filing, the latest casualty since FTX’s collapse earlier this month.
This week, investors will keep a close watch on November US consumer confidence data, due today (Nov 29); the government's second estimate for third-quarter gross domestic product, due tomorrow; and November non-farm payrolls due on Friday. – AFP, Reuters