Futures drop on U.S.-China trade worries
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[September 11, 2018]
By Shreyashi Sanyal
(Reuters) - U.S. stock index futures were
trading lower on Tuesday, as fears of tariffs on almost all Chinese
imports by the United States haunted investors, amid worsening trade
relations between the two countries.
President Donald Trump on Friday threatened duties on $267 billion of
goods on top of planned tariffs on $200 billion of Chinese products.
China has vowed to respond if the United States took any new steps on
The fresh round of trade spat comes at a time when China has decided to
approach the World Trade Organization next week for permission to slap
sanctions on the United States, for Washington's non-compliance with a
ruling in a dispute over U.S. dumping duties.
"The futures are pointing to a weak opening as geopolitical, trade
issues continue to weigh on the markets. Would expect another trying
directionless market as investors stay cautious," said Peter Cardillo,
chief market economist at Spartan Capital Securities in New York.
Shares of trade-sensitive Caterpillar <CAT.N> slipped 0.7 percent in
premarket trading. Boeing <BA.N> dropped 1 percent. The planemaker
raised its estimate for purchase of new planes by China over the next
two decades by 6.2 percent.
Shares of chipmakers, which rely on China for a major portion of their
revenue, also fell. Intel <INTC.O>, Micron <MU.O> and Nvidia <NVDA.O>
were down between 0.3 percent and 0.9 percent.
U.S. stocks, however, started this week in a better mood, as the S&P 500
and Nasdaq rebounded on Monday to snap a four-day losing streak,
although a drop in Apple <AAPL.O> kept gains in check.
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Traders work on the floor of the New York Stock Exchange shortly
after the opening bell in New York, U.S., September 10, 2018.
At 7:31 a.m. ET, Dow e-minis <1YMc1> were down 114 points, or 0.44 percent. S&P
500 e-minis <ESc1> were down 7 points, or 0.24 percent and Nasdaq 100 e-minis
<NQc1> were down 17 points, or 0.23 percent.
Also in focus was Hurricane Florence, now a Category 4 storm that is expected to
grow stronger before making landfall on Thursday, most likely in southeastern
North Carolina near the South Carolina border.
Insurer Travelers <TRV.N> dropped 0.7 percent, falling for the second day in a
row, on the storm warning. But, home improvement chains Lowe's Companies <LOW.N>
and Home Depot <HD.N>, whose shares hit record highs on Monday, were up roughly
1 percent each.
Nike <NKE.N> rose 0.6 percent after brokerage Canaccord Genuity upgraded the
world's No.1 sportswear maker's shares, citing that the company has regained its
footing and is solidly marching back to top form.
Integrated Device Technology <IDTI.O> jumped 11.5 percent after Japan's Renesas
Electronics <6723.T> agreed to buy chipmaker in a $6.7 billion deal to deepen
its push into semiconductors for self-driving cars.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Arun Koyyur)
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