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Investing.com – The Dow reversed gains on Thursday as late selling hit stocks after President Donald Trump said he would hold a news conference Friday on China that could address Beijing’s power grab in Hong Kong.
The Dow Jones Industrial Average fell 0.58%, or 148 points, the S&P 500 fell 0.21%, while the Nasdaq Composite slipped 0.46%.
China’s National People’s Congress approved a national security law for Hong Kong that it claims will crack down subversion, succession, terrorism and activities by foreign forces that interfere in Hong Kong.
The move has been widely condemned, with governments of the U.S., Australia, Canada, and the U.K. expressing their concerns.
Just a day earlier, U.S. Secretary of State Mike Pompeo said that Hong Kong no longer had a high degree of autonomy from China, throwing Hong Kong’s status as a trade hub into doubt and raising concerns that Washington and Beijing are headed on a collision course just months after both sides agreed a truce on trade.
Fresh concerns over rising U.S-China tensions soured sentiment on stocks, forcing the broader market to cut its gains, paced by declines in energy and financials.
Financials gave up some of their gains from earlier this week as investors took profits on bank stocks, with JPMorgan (NYSE:NYSE:JPM), Bank of America (NYSE:NYSE:BAC) and Citigroup (NYSE:C) ending the day lower.
On the economic front, further signs of the Covid-19 impact on the economy did little rein in bullish bets on an economic rebound in the second half of the year amid optimism over the progress on reopening the economy so far.
The U.S. Labor Department reported that workers filed 2.123 million new unemployment claims last week, just above forecasts of 2.1 million, but below the prior week’s downwardly revised 2.446 million.
In another stark reminder of the Covid-19 pandemic’s impact on the economy, revised government data showed first-quarter GDP contracted at an annual pace of 5%, rather than the initial estimate of 4.8%.
As efforts to reopen the economy continue, healthcare stocks caught a bid, with Moderna and Gilead (NASDAQ:GILD) leading the pack of drugmakers in the race to find a Covid-19 cure.
Moderna (NASDAQ:MRNA) jumped 6.4% after reaching a deal with CordenPharma for the supply of volumes of the lipids used to produce its coronavirus vaccine candidate mRNA-1273.
Tech came under pressure as social media stocks were shunned as Trump signed an executive order seeking to limit the power of social media platforms like Twitter Inc (NYSE:TWTR) and Facebook (NASDAQ:FB).
The last wave of earnings from corporates also garnered attention.
Discount retailer Dollar Tree (NASDAQ:DLTR) rose 11.6% after its first-quarter earnings topped consensus estimates as panic buying during the height of the pandemic demand boosted growth.
Cloud-based company Workday (NASDAQ:WDAY) surged 7.5% after first-quarter revenue beat estimates, rising 23% on strong demand for its cloud services offerings.
Elsewhere, Boeing (NYSE:BA) cut its gains to end flat for the day despite detailing plans to cut 13,000 jobs and confirming that it would production of its maligned 737 MAX jets.
