By CCN: The Dow and broader U.S. stock market finished mixed-to-lower on Wednesday after dismal Chinese export data shined the spotlight on a sluggish global economy, prompting investors to reconsider their holdings of risk-on assets.
Dow Flat-Lines; S&P 500 Falls
All of Wall Street’s benchmark indexes were reporting gains through the late afternoon before pivoting lower in the final moments of trade. After climbing more than 150 points, the Dow Jones Industrial Average gave back all of its gains to finish flat at 25,967.33. The blue-chip index opened lower on Wednesday, reflecting tepid pre-market conditions for Dow futures.
The broad S&P 500 Index closed down 0.2% at 2,879.42. Most of the declines were concentrated in utilities stocks, which plummeted 1.4% as a sector.
Meanwhile, the technology-focused Nasdaq Composite Index settled down 0.3% at 7,943.32.
The CBOE Volatility Index, commonly known as the VIX, showed signs of stabilizing after surging more than 50% on Monday and Tuesday. The so-called “fear index” would eventually settle just below 20, having gained roughly 3%. VIX surged more than 50% in the first two days of the week.
China’s Trade Balance Weakens Unexpectedly
China’s export industry languished unexpectedly last month, offering the latest glimpse of a domestic economy trying to balance expansion with a renewed emphasis on services and consumption.
Data from the Administration of Customs showed a 2.7% decline in exports from a year earlier, partially reversing a 14.2% gain the month before. Imports climbed 4% annually, defying expectations of a similar drop.
Beijing’s dollar-denominated trade surplus plunged to $13.84 billion in April from $32.67 billion in March - a month-over-month decline of 57%. Analysts were expecting the surplus to strengthen to $35 billion.
China is currently negotiating a new trade agreement with the United States, its largest export market, but key stumbling blocks remain. On Sunday, President Trump threatened to impose the highest tariff on all of China’s exports to the United States if Beijing doesn’t return to the negotiating table and make important concessions.
Trump upped the tariff rhetoric after one of his top trade advisers informed him that Beijing had reneged on some of its prior commitments concerning intellectual property.
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