Escalating US-China trade tensions hit stocks

U.S. stocks extended losses Friday after China responded forcefully to President Trump's announcement of more tariffs, a development that offset the positive effect on Wall Street of a strong July jobs report.

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It was the Dow Jones Industrial Average's fourth straight losing session and the fifth straight losing session for the Nasdaq Composite and the S&P 500.

Trump, who was said to be disappointed with the result of recent trade talks in Shanghai, announced that he was levying 10 percent tariffs on $300 billion of Chinese imports, effective Sept. 1.

China's government responded Friday, accusing Trump of violating his June agreement with President Xi Jinping to revive negotiations aimed at ending a costly fight over Beijing's trade surplus and technology ambitions.

"China will have to take necessary countermeasures to resolutely defend its core interests," said a Foreign Ministry spokeswoman Hua Chuying.

The next round of trade talks between the U.S. and China are scheduled for September.

That sent U.S. markets lower, with all three major equity indexes posting losses, although as the closing bell approached the Dow came off the session lows.

TickerSecurityLastChangeChange %
I:DJIDOW JONES AVERAGES27781.96-1.63-0.01%
SP500S&P 5003096.63+2.59+0.08%
I:COMPNASDAQ COMPOSITE INDEX8479.017137-3.08-0.04%

The tariff news roiled Asian markets, China's Shanghai fell 1.4 percent, Hong Kong's Hang Seng dropped more than 2 percent and Japan's Nikkei hit a six-week low with a loss of  2.1 percent.

In Europe, London's FTSE was down 2.2 percent, Germany's DAX dropped 2.8 percent and France's CAC lost 3.1 percent.

Investors were also digesting the July jobs report, which showed 164,000 nonfarm jobs were created in July. That was in line with expectations. The unemployment rate held steady at 3.7 percent.

TickerSecurityLastChangeChange %
XOMEXXON MOBIL CORPORATION68.50-0.30-0.44%
CVXCHEVRON CORP.121.96-0.32-0.26%

The U.S. trade deficit slipped in June as both imports and exports fell. The Commerce Department said on Friday, the trade deficit was off 0.3 percent to $55.2 billion. The estimate was for $54.6 billion. The goods trade deficit with China decreased 0.8 percent to $30.0 billion, with imports falling 0.7 percent. Exports to China were unchanged in June.

The yield on the 10-year Treasury fell to 1.88 percent as investors sought safety for their assets.

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The price of U.S. crude oil benchmark West Texas Intermediate rose to $55.54 per barrel. Gold climbed $21.60 to settle at $1,455.10 per ounce.

Energy and technology shares led the market's decline. ExxonMobil reported a 21 percent drop in quarterly profit on Friday as lower natural gas prices took a toll.

TickerSecurityLastChangeChange %
XOMEXXON MOBIL CORPORATION68.50-0.30-0.44%
CVXCHEVRON CORP.121.96-0.32-0.26%
AAPLAPPLE INC.262.64-1.83-0.69%
AMZNAMAZON.COM INC.1,754.60+1.49+0.09%

Chevron reported a 26.3 percent jump in quarterly profit helped by higher oil and gas production. The company also received a $1 billion, one-time breakup fee from its failed bid for a rival. more than offset lower energy prices and a rise in expenses.