Thursday's Stock Market Noon: US Equities Remain Under Pressure On China Trade Worries, Passage Of Hong Kong Bill

U.S. stock indexes traded lower Thursday noon following some conflicting developments with China. While China’s top trade negotiator called for a new round of trade talks, the U.S. Congress passed a bill that supports Hong Kong protesters.

The Dow Jones Industrial Average dropped 82.94 points to 27,738.15 while the S&P 500 lost 9.34 points to 3,099.12 and the Nasdaq Composite Index dropped 36.72 points to 8,490.01.

The Wall Street Journal reported Chinese Vice Premier Liu He invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to hold a meeting in Beijing for new trade talks.

Bloomberg reported Liu was “cautiously optimistic” about reaching a phase one trade deal.

However, China is likely upset by passage in the U.S. Congress late Wednesday of a bill that endorses the pro-democracy protesters in Hong Kong and requires the U.S. to scrutinize Hong Kong’s special trade status. The U.S. Senate had earlier passed the same bill. It was to go to President Trump Thursday.

Traders also digested a slew of mixed economic data.

The National Association of Realtors said on Thursday that existing home sales rose 1.9% to a seasonally adjusted annual rate of 5.46 million units in October, up from 5.36 million units in September. Economists had forecast existing home sales rising to 5.47 million units.

The Conference Board Leading Economic Index slipped 0.1% to 111.7 in October. Economists expected the index to climb by 0.2%.

"The major difference this month is the softening in the labor market, whereas conditions in manufacturing remain weak and show no signs of improvement yet," Ataman Ozyildirim, senior director of economic research at the board said. "Taken together, the [Index] suggests that the economy will end the year on a weak note, at just below 2% growth.

Initial jobless claims were unchanged at 227,000 for the week ended Nov. 16, but exceeded economists’ forecasts of 218,000 after seasonal adjustments. Last week’s claims were revised upward by 2,000.

The Philadelphia Fed manufacturing index rose to a seasonally adjusted reading of 10.4 in November, up from 5.6 in October. Economists had expected a reading of 7 for November.

Minneapolis Fed President Neel Kashkari said he is not expecting the economy to slide into recession. “Right now overall my base case scenario is continued economic growth,” he said at the Minnesota Chamber of Commerce. “But there are risks on the horizon, the biggest risks being around tariffs and trade and the uncertainty that creates.”

Overnight, Asian markets finished broadly lower with the Hang Seng plunging 1.57% while Japan's Nikkei 225 fell 0.48% and China's Shanghai Composite was down by 0.25%.

European markets finished lower as the FTSE 100 fell 0.33% while Germany's DAX slipped 0.16% and France's CAC 40 slid 0.22%.

Crude oil futures were down 1.88% to $58.08 per barrel and Brent crude gained 1.13% at $63.53. Gold futures were down 0.32%.

The euro was down 0.08% to $1.1065 while the pound sterling slipped 0.09% to $1.2912.