Oil prices drop on China import data, weighing on equities

Business Thursday 09/August/2018 12:42 PM
By: Times News Service
Oil prices drop on China import data, weighing on equities

New York: Oil prices fell after Chinese import data showed a slowdown in demand, weighing on world equity markets which fell modestly, even as U.S. technology shares extended recent gains.
China announced retaliatory trade tariffs in response to the United States' decision to impose 25 per cent tariffs on another $16 billion of Chinese goods starting on August 23.
Stock markets had recently continued to rise amid sturdy corporate results and data, despite the continuing trade battle between the United States and China, and the U.S. benchmark S&P index closed Tuesday less than half a per cent off record highs hit on January 26.
"The S&P and the stock market are telling you how important the tariffs are, and the market is close to making new highs," said Bruce Bittles, chief investment strategist at Robert W. Baird & Co in Sarasota, Florida.
"You've got full employment and wages are going up. Small business optimism is about the highest it's ever been. All of that is driving this."
Amazon, Facebook and Alphabet were among the biggest positive influences for the S&P 500 on Wednesday.
The Dow Jones Industrial Average fell 62.04 points, or 0.24 per cent, to 25,566.87, the S&P 500 lost 2.33 points, or 0.08 per cent, to 2,856.12 and the Nasdaq Composite dropped 4.16 points, or 0.05 per cent, to 7,879.51.
MSCI's gauge of stocks across the globe shed 0.08 per cent, while the pan-European FTSEurofirst 300 index lost 0.20 per cent.
In the oil market, the U.S.-China trade dispute weighed on prices. U.S. crude fell 3.92 per cent to $66.46 per barrel and Brent was last at $71.92, down 3.66 per cent on the day.
China's crude imports recovered slightly in July after falling for the previous two months, but were still among the lowest this year due to a dropoff in demand from the country's smaller independent, or "teapot," refineries.
Retaliatory trade tariffs by China briefly boosted the dollar index, which rose as high as 95.417, near a more than one-year peak of 95.652 hit on July 19, before dropping back to near flat on the day.
The index has struggled to break much above the 95.5 level, which it has tested multiple times in the past two months.
The dollar index, tracking it against a basket of major currencies, rose 0.01 per cent, U.S. Treasury yields were little changed. Benchmark 10-year notes last fell 1/32 in price to yield 2.9749 per cent, from 2.973 per cent late on Tuesday.