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Technology stocks lead US markets lower in early trading

by Ace Damon
Technology stocks lead US markets lower in early trading

NEW YORK (AP) – Shares fell at the start of negotiations on Monday on Wall Street, as trade tensions increased with China's diplomatic retaliation for US support for protesters in Hong Kong.

Technology stocks were the biggest hurdle on the market. Many companies in this industry rely on China for sales and supply chains and can become very volatile with new developments in trade negotiations. Adobe fell 2.4% and Microsoft fell 1%.

Communications stocks were also falling. Netflix fell 1.5% and Twitter fell 1.3%.

Banks were among the few winners, with falling bond prices increasing bond yields. The 10-year Treasury yield rose to 1.85% from 1.77% on Friday. Banks rely on higher bond yields to charge more lucrative interest on loans. Bank of America rose 1.1%.

Energy companies had the best results, with oil prices rising 1.7%. ConocoPhillips was up 1.4% and Halliburton was up 2.1%.

Steelmakers rose after President Donald Trump said the United States would impose tariffs on steel and aluminum imports from Argentina and Brazil.

MAINTAINING SCORE: S&P; The 500 index fell 0.6% from 10:05 am Eastern time. The Dow Jones Industrial Average fell 137 points, or 0.5%, to 28,001. Nasdaq fell 1.1%. The Russell 2000 index of the company's smaller shares fell 0.7%.

TRADE TENSIONS: Negotiations to end the long-standing US-China trade war may face a more difficult path in December following an outbreak in Hong Kong. China said on Monday it would suspend visits by US military ships and aircraft to semi-autonomous territory and sanction several US pro-democracy groups in retaliation for signing a law that supports anti-government protests.

President Trump expressed concern that legislation could affect the negotiations. Wall Street hopes countries can make progress towards at least postponing new scheduled tariffs for December 15 with Chinese products worth $ 160 billion, including smartphones and laptops.

ECONOMIC CLOCK: Wall Street faces a busy week of reports that can provide a clearer picture of the health of the economy.

US production shrank more than expected in November, according to data released by the Institute for Supply Management on Monday. Manufacturing has been a weak point in the economy as a whole. A separate report on the service sector, which makes up the bulk of the economy, is expected on Wednesday.

Investors will catch a glimpse of the health of the labor market on Wednesday when the ADP payroll processor releases its survey for November. The Labor Department will release its closely tracked employment data on Friday. Solid employment growth, coupled with consumer spending, are among the main factors driving economic growth.

ABROAD: Asian markets rose higher. Chinese manufacturing expanded in November, according to separate reports from Caixin magazine and the Chinese Federation of Logistics and Purchasing. Manufacturing has been a weakness for China throughout the year.

European markets have fallen.

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