U.S. stocks began September with declines as investors looked ahead to a busy week of trade negotiations and economic data. Stocks drifted lower shortly after the opening bell, then pared declines in the final hours of the trading session, with the Dow Jones Industrial Average erasing nearly all of its losses for the day. The Dow Jones Industrial Average dropped 12.34 points, or less than 0.1%, to 25952.48, notching its third consecutive loss. The index earlier fell as much as 159 points. The S&P 500 shed 4.80 points, or 0.2%, to 2896.72, and the Nasdaq Composite lost 18.29 points, or 0.2%, to 8091.25. Activity was relatively muted as trading resumed following the Labor Day holiday. Analysts say they expect trade to remain in focus this week, with talks over the North American Free Trade Agreement slated to resume Wednesday. President Trump’s weekend threats to leave Canada out of a new Nafta kept stocks in Europe and Asia subdued on Monday. Earlier in the day, early sluggishness in Asian equities was shaken off in a number of markets, with afternoon rallies putting a number of benchmarks at session highs and reversing at least some of the declines of the past few days.
Meanwhile, gold futures settled below $1,200 an ounce for the first time in more than a week. Demand for the dollar-denominated precious metal came as a jump in the Institute for Supply Management’s U.S. manufacturing index to its highest level in more than decade further boosted the dollar. December gold declined $7.60, or 0.6%, to settle at $1,199.10 an ounce, after the yellow metal settled at $1,206.70 an ounce on Friday. In observance of Labor Day in the U.S., Comex-traded metals didn’t settle on Monday. The contract hasn’t settled below $1,200 since Aug. 23.
IRON ORE: 66.48 + 0.55 (October contract)
Oil futures pared much of their earlier gains, with U.S. benchmark prices struggling at $70 a barrel, as a storm in the Gulf of Mexico looked set to miss the bulk of the region’s energy production platforms. A recent survey showing production among members of the Organization of the Petroleum Exporting Countries at the highest level of the year so far also limited gains for oil prices. October West Texas Intermediate crude on the New York Mercantile Exchange, the U.S. oil benchmark, rose 19 cents, or 0.3%, to $69.99 a barrel – trading well below earlier highs that had exceeded $71. The October contract finished the month of August with a rise of about 3.2%, according to FactSet data. Most U.S. markets were closed Monday in observance of the Labor Day holiday. November Brent, the global benchmark, edged up 5 cents, or less than 0.1%, to $78.20 a barrel. The global benchmark’s October contract expired at Friday’s settlement. That contract saw a monthly climb of about 4.3%.
The U.S. dollar climbed higher, as pressure on emerging markets continued, allowing the buck to benefit from haven flows. The currency, measured by the ICE U.S. Dollar Index, was last up 0.3% at 95.463, pulling back from its session highs but still leaving the dollar’s major rival – the euro – at a 1 1/2 week low. The shared currency was last down 0.3% at $1.1577, according to FactSet. The buck got an extra boost from economic data that showed manufacturing to grow at the fastest pace in 14 years. The ISM manufacturing index came in at 61.3 in August, beating the consensus estimate of 57.9. Construction spending for July rose 0.1%, undercutting expectations. In emerging markets, there was plenty of renewed pain to go around. South Africa’s rand was one of the worst performers, with the dollar rallying more than 2% against it, after second-quarter GDP data showed that South Africa’s economy contracted in back-to-back quarters, a downshift that usually meets the standard technical for a recession. The data show an annualized GDP contraction of 0.7% between April and June, following a 2.6% contraction in the first quarter.
Chinese equities jumped most, with big-cap names rising more than 1%. Hong Kong indexes are up nearly as much while South Korea, the Philippines and Taiwan all logged solid days. But Japan’s Nikkei fell slightly despite a weaker yen and Australia’s benchmark was hit by weakness in financials and energy. The laggard was Indonesia’s JSX — at 0.7% — with that market weighed down by fresh 20-year lows for the rupiah. South Korean stocks were among the Asian equities that rose solidly, leaving that market near session highs after tech-related weakness Monday reversed some. The Kospi finished up 0.4% at 2315.72 as chipmakers Samsung and Hynix rose a bit more. Hyundai Motor advanced 1.2% and construction names also rose further.