Daily Stock Market Update — September 3, 2019

Technology companies led stocks broadly lower as disappointing economic data and the latest escalation in the U.S.-China trade war put investors in a selling mood and more in Tuesday’s Stock Market Update.

The sell-off Tuesday came as markets opened after a long weekend to expanded tariffs between Washington and Beijing and little sign that talks would restart soon.

Chipmakers, which rely heavily on sales to China, came under pressure. Qualcomm sank 3.4%.

Boeing dropped 2.6% after United Airlines and American Airlines took steps to delay until December the expected return of the 737 Max jets.

Industrial stocks were among the biggest decliners. Caterpillar, which is seen as an industry bellwether when it comes to the impact of trade, fell 1.6%.

Oil prices dropped 2.1%, dragging down share prices for energy stocks. Chevron slid 1.2%.

Investors fled to safer holdings, including utility stocks, bonds and gold.

Utilities held up well, as did makers of consumer products such as Procter & Gamble, which added 0.9%. Gold producer Newmont Goldcorp also gained 1.2%.

Bond prices rose, sending yields lower. The yield on the 10-year Treasury fell to 1.46% from 1.50% late Friday. The lower bond yields weighed on banks. Bank of America lost 1.6%.

The surge in demand for U.S. government bonds came as new U.S. manufacturing data stoked fears of an economic slowdown. Factory activity in the U.S. last month fell short of economists’ forecasts and shrank for the first time since August 2016. Businesses are increasingly wary of investing and expanding because of uncertainty surrounding the U.S.-China trade dispute.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 fell 20 points, or 0.7%, to 2,906. The Dow Jones Industrial Average fell 285, or 1.1%, to 26,118. The Nasdaq lost 88, or 1.1%, to 7,874.

Smaller company stocks also fell sharply, sending the Russell 2000 index down 1.5%.

Major indexes in Europe fell broadly.

TRADE WAR EXPANDS: The latest escalation in the lingering trade war has been expected since early August when the U.S. announced plans for the new tariff measures, prompting China to retaliate. The worsening trade situation between the world’s two largest economies dragged the S&P 500 to its second monthly loss of the year in August and dented investors’ confidence in global economic growth.

The U.S. and China are supposed to meet this month to continue trade negotiations, but investors have grown pessimistic that any resolution will be forthcoming in the near future.

ECONOMIC RED FLAG: The Institute for Supply Management, an association of purchasing managers, said Tuesday that its manufacturing index slid to 49.1 last month, from 51.2 in July. Any reading below 50 signals a contraction. That’s the lowest for the index since January 2016.

A global softening in demand, worsened by the increasingly high-risk trade war between the U.S. and China, appears to be hurting American manufacturers. More than half of the public comments from companies surveyed by ISM pointed to economic uncertainty as a drag on their businesses.

BRITAIN AND BORIS: European stocks fell and the British pound dropped to its lowest level against the U.S. dollar in 34 years, excluding a brief “flash crash” in 2016 that may have been caused by technical glitches, as the U.K. faces a potentially chaotic exit from the European Union.

Prime Minister Boris Johnson’s office said he would call an early election if his opponents pass legislation that would block his plans to leave the European Union by an Oct. 31 deadline.

PROS FOR CONN’S: Conn’s jumped 18.3% after the furniture and electronics retailer blew past Wall Street’s second quarter profit forecasts. The company also topped analysts’ revenue expectations.

DELAYED FLIGHT: Boeing dropped 2.6% after United Airlines and American Airlines took steps to delay until December the expected return of Boeing 737 Max jets.