US stocks were sharply lower today, extending the previous week’s decline on heavy volume as investors monitored the continued civil unrest in Hong Kong for any potential impact on Chinese growth.
The day’s losses were broad, with nine of the ten primary S&P 500 sectors lower on the day. The only group to rise, utilities, are viewed as a defensive play and were up less than 0.1 percent. Energy stocks were the biggest losers, off 1.1 percent.
The S&P 500 fell back below its 50-day moving average, a sign of weak near-term momentum. Last week, major indexes suffered their biggest weekly decline of the past eight.
Volume was heavier than average, and market participants said more traders were in the office following a period where many were out for vacation.
The Dow Jones industrial average was down 91.64 points, or 0.54 percent, at 17,021.51. The Standard & Poor’s 500 Index was down 10.24 points, or 0.52 percent, at 1,972.61. The Nasdaq Composite Index was down 20.16 points, or 0.45 percent, at 4,492.04.
HSBC, LVMH and other companies exposed to Hong Kong underperformed a broader drop in European stock markets as civil unrest in the Asian city continued.
Hong Kong democracy protesters defied volleys of tear gas and police baton charges to stand firm in the centre of the global financial hub, in one of the biggest political challenges for Beijing since the Tiananmen Square crackdown 25 years ago.
Banks in Hong Kong, including HSBC, Citigroup, Bank of China, Standard Chartered and DBS, temporarily shut some branches and advised staff to work from home or go to secondary branches.
HSBC fell 2.3 percent while Standard Chartered dropped 1.6 percent, making those two banks among the worst-performing stocks on the broader, pan-European FTSEurofirst 300 index, which ended down 0.4 percent at 1,371.11 points.
The luxury goods sector was also affected by the unrest in Hong Kong, since many of the companies in the sector have targeted a growing affluent Chinese clientele in recent years.
Swiss luxury goods group Richemont fell 1.7 percent while French rival LVMH declined by 1.5 percent.
The FTSEurofirst 300 index remains up by around 4 percent since the start of 2014. The index hit a peak of 1,410.93 points on Sept. 19, its highest level since early 2008, but has since eased back from that rally.
Meanwhile, Japan’s Nikkei share average rose today with the weak yen supporting sentiment, while risk taking was buoyed after the US economy grew at its fastest pace in 2-1/2 years in the second quarter.
But volume was thin as investors awaited cues, such as from US jobs data due out on Friday.
The Nikkei share average ended 0.5 percent higher at 16,310.64.
However, SoftBank Corp fell 1.2 percent, with investors failing to digest the implications of the telecom giant being in talks to acquire DreamWorks Animation SKG.
The broader Topix added 0.4 percent to 1,337.30 in thin trade, with only 1.85 billion shares changing hands, the lowest since Sept 8. The JPX-Nikkei Index 400 also gained 0.4 percent to 12,163.84.
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