Concerns About Turkey Lead To Weakness On Wall Street - US Commentary

WASHINGTON (Alliance News) - Following the lackluster performance seen over the two previous ...

Alliance News 10 August, 2018 | 9:34PM
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WASHINGTON (Alliance News) - Following the lackluster performance seen over the two previous sessions, stocks moved notably lower during trading on Friday. The major averages all moved to the downside after closing mixed for two straight days.

The major averages ended the day firmly in negative territory but off their lows of the session. The Dow slid 196.09 points or 0.8% to 25,313.14, the Nasdaq fell 52.67 points or 0.7% to 7,839.11 and the S&P 500 dropped 20.30 points or 0.7% to 2,833.28.

The weakness on Wall Street came amid concerns about rising tensions between the US and Turkey due to the Turkish detention of US pastor Andrew Brunson.

The Turkish lira has shown a sharp decline to a record low, contributing to considerable weakness in the overseas markets.

In response, Turkish President Recep Erdogan has urged Turks to sell dollars and gold and buy the lira.

"There are various campaigns being carried out. Don't heed them," Erdogan said. "Don't forget, if they have their dollars, we have our people, our God."

President Donald Trump subsequently announced that he has authorized the doubling on steel and aluminum tariffs on Turkey.

"I have just authorized a doubling of Tariffs on Steel and Aluminum with respect to Turkey as their currency, the Turkish Lira, slides rapidly downward against our very strong Dollar!" Trump said in a post on Twitter.

The president added, "Aluminum will now be 20% and Steel 50%. Our relations with Turkey are not good at this time!"

In US economic news, the Labor Department released a report showing a modest increase in consumer prices in the month of July.

The Labor Department said its consumer price index rose by 0.2% in July after inching up by 0.1% in June. The increase in prices matched economist estimates.

Excluding food and energy prices, the core consumer price index also edged up by 0.2% in July, matching the increases seen in the two previous months as well as expectations.

Semiconductor stocks turned in some of the market's worst performances on the day, resulting in a 2.5% slump by the Philadelphia Semiconductor Index.

Considerable weakness was also visible among steel stocks, as reflected by the 2.5% drop by the NYSE Arca Steel Index.

Chemical, banking, and housing stocks also saw notable weakness, moving lower along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index tumbled by 1.3%, while Hong Kong's Hang Seng Index dropped by 0.8%.

The major European markets also moved to the downside on the day. While the UK's FTSE 100 Index slumped by 1%, the French CAC 40 Index tumbled by 1.7% and the German DAX Index plunged by 2%.

In the bond market, treasuries extended the upward move seen in the previous session amid the concerns about Turkey. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, tumbled by 7.8 basis points to 2.857%.

Next week's trading may be impacted by reaction to reports on import and export prices, retail sales, industrial production, housing starts, and consumer sentiment.

Copyright RTT News/dpa-AFX

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