US STOCKS-Wall Street set to open lower as investors…

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US STOCKS-Wall Street set to open lower as investors…

By Medha Singh

Aug 7 – Wall Street was set to open lower on Wednesday, as investors sought safety in gold and government bonds on worries about the impact of a long-drawn trade war on global economies.

A U.S. bond market indicator on recession was at its most elevated levels since March 2007 as Treasury yields took another dramatic drop.

China’s offshore yuan fell through the key level of 7-per-dollar mark after having recovered partly on Tuesday that had helped drive a 1% gain in the three main Wall Street indexes.

“There are two factors that are causing this reversal in market – rates are falling and gold is moving higher,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Investors are very much concerned about the trade war and its expansion and that’s certainly being manifested in the price to gold.”

Gold prices scaled a six-year peak.

Major U.S. lenders, which tend to suffer in a lower interest-rate environment, fell in premarket trading. Bank of America Corp, Goldman Sachs Group Inc, JP Morgan and Morgan Stanley fell between 1.6% and 2.1%.

At 8:51 a.m. ET, Dow e-minis were down 247 points, or 0.95%. S&P 500 e-minis were down 27 points, or 0.94% and Nasdaq 100 e-minis were down 72.25 points, or 0.96%.

With the second-quarter earnings season winding down, about 73% of the 426 S&P 500 companies that have reported results so far have topped earnings estimates.

Walt Disney Co dropped 4.7% after its quarterly earnings missed analysts’ forecast as the company invested heavily in its streaming platform and began folding in assets purchased from Twenty-First Century Fox.

CVS Health Corp rose 4.1% after the drugstore chain posted profit above estimates, boosted by strong sales in the Aetna health insurance business it acquired last year and raised its full-year earnings forecast.

Cambrex Corp soared 47.3% after the contract development and manufacturing company said it was being bought by an affiliate of private equity firm Permira Funds for about $2.02 billion. (Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva)