Stocks have been lower since investors returned from the long holiday weekend after tariffs went into effect on September 1, as promised, and neither Washington nor Beijing has offered more detail on their tentative face-to-face trade talks due to be held this month. Meanwhile, the U.S. ISM dropped into contraction territory in August, which is also being widely blamed on the trade dispute.
ECONOMIC EVENTS: In the U.S., Markit's manufacturing PMI slipped to 50.3 in the final August reading , down from 50.4 in July but improved from the 49.9 preliminary figure. The ISM manufacturing index dropped 2.1 points to a 3-year low of 49.1 in August, which was weaker than expected and indicates the index is in contraction territory. Construction spending rebounded 0.1% in July following a 0.7% decline in June.
In Asia, China's official manufacturing PMI for August reported over the weekend came in at 49.5, down from 49.7 in July. The Caixin manufacturing PMI for August was 50.4, which was a bit better than expected. The National Bureau of Statistics' non-manufacturing PMI came in at 53.8. Japan's final manufacturing PMI for August was 49.3, a downward revision versus the flash reading of 49.5.
On the trade front, officials are having a difficult time coming up with a schedule for a planned meeting this month after the U.S. spurned a Chinese request to delay tariffs that took effect this weekend, according to Bloomberg. President Trump tweeted this morning: "We are doing very well in our negotiations with China. While I am sure they would love to be dealing with a new administration so they could continue their practice of "ripoff USA"...16 months PLUS is a long time to be hemorrhaging jobs and companies on a long-shot...And then, think what happens to China when I win. Deal would get MUCH TOUGHER!"
TOP NEWS: Shares of Amazon (AMZN), KLA-Tencor (KLAC) and Lam Research (LRCX) are among the noteworthy outperformers on the S&P 500 amid a broadly down day for the broader market following bullish analysts commentary on the trio. Evercore ISI analyst C.J. Muse upgraded Lam Research (LRCX) and KLA-Tencor (KLAC), each to Outperform from In Line, citing his view that there are both company and industry specific catalysts that will lead the Semiconductor Equipment stocks higher into year-end. Meanwhile, RBC Capital analyst Mark Mahaney raised his price target on Amazon shares to $2,600 from $2,250 after his deep-dive analysis into the company's Prime one-day shipping initiative. The analyst believes that Amazon is tapping into "real demand," with survey findings suggesting that 64% of U.S. internet users are "extremely" or "very" interested in next-day shipping. Based on his expectations of sustained revenue acceleration, Mahaney raised his FY20 and FY21 revenue forecasts for the e-commerce giant.
MAJOR MOVERS: Among the noteworthy gainers was Conn's (CONN), which rose 20% after the company reported better than expected second quarter sales and earnings. Also higher was The Medicines Co. (MDCO), which is up 13% after announcing that inclisiran sodium 300 mg met all primary and secondary efficacy endpoints, was well-tolerated and "demonstrated an excellent safety profile" in the phase 3 ORION-11 pivotal clinical study.
Among the notable losers following the institution of the next round of tariffs on Chinese imports were retailers that include Signet Jewelers (SIG), Bed Bath & Beyond (BBBY), Michaels (MIK) and G-III Apparel (GIII). Also lower was ProPetro (PUMP), which slid 7% after disclosing that Mark Howell informed the board of directors of the company of his intent to resign from his position as the general counsel and corporate secretary of the company, effective September 29.
INDEXES: Near midday, the Dow was down 333.28(-1.26%, to 26,070.00, the Nasdaq was down 75.91(-0.95%, to 7,886.97, and the S&P 500 was down 22.46(-0.77%, to 2,904.00.
