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Stocks give up an early gain and turn lower on Wall Street

Stocks give up an early gain and turn lower as Wall Street's recent bout of volatility continues.

AP Reported by: AP
Published on: October 30, 2018 1:00 IST
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Image Source : AP Stocks give up an early gain and turn lower on Wall Street

NEW YORK (AP) — Stocks gave up a big gain from earlier in the day Monday and turned lower in afternoon trading as Wall Street's recent bout of volatility continued.

Technology and communications companies posted some of the biggest losses Monday.

Amazon slid again, and Netflix and Facebook also fell. IBM fell after announcing that it would pay a big premium to buy software company Red Hat in a bid to become more competitive in cloud computing.

The S&P 500 index is down 9 percent in October, putting it on track for its worst months since the Financial Crisis.

Automakers rallied following a report that China could cut its import tax on autos.

Stocks in Europe turned sharply higher. Italy's main stock index rallied after Standard & Poor's did not lower the country's credit rating.

KEEPING SCORE: The S&P 500 index fell 9 points, or 0.4 percent, to 2,649 as of 2:56 p.m. Eastern time. The Dow Jones Industrial Average fell 137 points, or 0.6 percent, to 24,551. It was up 352 earlier.

The Nasdaq composite, which is heavily weighted with technology stocks, lost 91 points, or 1.3 percent, to 7,076 The Russell 2000 index of smaller-company stocks was little changed at 1,484.

Stocks have plunged since early October and trading has been especially volatile the last few days. The S&P 500 is down 9 percent this month, which would be its worst monthly loss since February 2009, shortly before the market bottomed during the financial crisis.

MORE TECH LOSSES: Amazon.com dropped another 6.8 percent to $1,530. The online retailer tumbled 7.8 percent Friday after it reported weak sales and gave a lower-than-expected revenue estimate for the quarter that includes the holiday shopping season. Amazon is nearing a "bear market," a Wall Street term that means a decline of more than 20 percent from a recent peak. Amazon traded above $2,000 a share in early September.

Some early gains for tech and internet stocks also faded. Microsoft shed 2.5 percent to $104.31. Alphabet, Google's parent company, lost 4.3 percent to $1,038. The stock slipped 1.8 percent Friday after Alphabet reported less revenue than analysts expected in the third quarter, and investors worried that regulators might make it tougher for the company to collect data.

DO YOU LIKE MY HAT? IBM said the purchase of Red Hat will help the company take the next step in cloud computing. Chairman and CEO Ginni Rometty said the deal will make IBM the world's biggest hybrid cloud provider, meaning it will offer companies a mix of on-site, private and third-party public cloud services. It's also the largest purchase in IBM's history.

Red Hat stock soared 42.7 percent to $166.49, reversing its losses from earlier this year. IBM fell 2.6 percent to $121.58.

CHANGING GEARS: Bloomberg News reported that regulators in China intend to propose cutting the tax on imported cars to 5 percent from 10 percent. The trade fight between the U.S. and China has hurt sales, and that slowdown is one of several factors that have damaged car company stocks this year.

General Motors jumped 1.7 percent to $33.19 and Ford climbed 3.3 percent to $9.27. Auto parts companies also rallied. BorgWarner jumped 5.5 percent to $40.16. After Cooper Tire & Rubber reported a bigger third-quarter profit than analysts expected, its stock surged 20.4 percent to $30.63.

EUROPE: Italy's FTSE MIB index rose 1.9 percent after Standard & Poor's did not downgrade the company's credit rating into "junk" status. Italy's new government plans to ramp up spending and European Union leaders have demanded it change its plans.

Germany's DAX rose 1.2 percent as Volkswagen, Daimler and BMW made big gains. Longtime Chancellor Angela Merkel said she won't leave office following weak state election results, but will step down as leader of her party. She has been chancellor of Germany since 2005 and will stay in office until 2021.

The CAC 40 in France added 0.4 percent and the British FTSE 100 rose 1.3 percent.

BRAZIL: Brazil's Bovespa rose in morning trading after far-right politician Jair Bolsonaro was elected president, but it later turned lower and fell 0.7 percent. Stocks climbed earlier this month after Bolsonaro led the previous round of voting, as investors preferred him to leftist parties.

The former army captain cast himself as a political outsider despite a 27-year career in Congress and rose to power by mixing hard right positions with tough, often violent words about women, gays and black and indigenous Brazilians.

BONDS: Bond prices fell. The yield on the 10-year Treasury note rose to 3.08 percent from 3.07 percent.

ENERGY: Benchmark U.S. crude dropped 0.8 percent to $67.04 per barrel in New York while Brent crude, used to price international oils, lost 0.4 percent to $77.34 per barrel in London.

CURRENCIES: The dollar rose to 112.35 yen from 111.85 yen. The euro fell to $1.1390 from $1.1412.

ASIA: Tokyo's Nikkei 225 sank 0.2 percent and Seoul's Kospi lost 1.5 percent. Hong Kong's Hang Seng advanced 0.4 percent.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP

Disclaimer: This is unedited, unformatted feed from the Associated Press (AP) wire.
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