Stocks struggled to hold on to tiny gains in early trading on Wall Street Thursday after shaking off an early loss. Investors found little to like in the latest buildup of tensions between the U.S. and China and more dismal news about fallout related to the coronavirus pandemic. The White House issued a report attacking Beijing’s economic and military policies and human rights violations. Meanwhile the number of Americans thrown out of work since the virus struck climbed to nearly 39 million. Macy’s fell after saying it could lose more than a $1 billion during its first fiscal quarter.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story is below:
Global stock markets declined Thursday on weak economic data in Europe and Asia and as Chinese trade tensions with Washington and Australia worsened.
Investors were also looking ahead to Friday’s meeting of China’s legislature for details of possible new steps by Beijing to stimulate its virus-battered economy.
London and Frankfurt opened lower. Tokyo, Shanghai and Australia declined after spending the day swinging between gains and losses.
Japan reported its exports fell 22% in April from a year earlier in their biggest decline since the 2008 crisis. Forecasters said they expect more export weakness due to slumping U.S. and European demand.
A survey of business managers in the eurozone showed that activity continued to shrink at a rapid pace in May, despite a slight pickup from the historic plunge in April. The publishers of the survey, IHS Markit, said it indicates a 9% drop in GDP this year, with a recovery likely to take years.
The outlook for the global economy meanwhile depends on infection numbers and vaccine development. Infection numbers are on the rise in the United States, Brazil and other countries. And China's conflicts with Washington and Australia over the coronavirus, trade and Beijing's technology ambitions are adding to uncertainty.
China has blocked beef imports from four Australian suppliers in possible retaliation for Australia’s support for an investigation into the origin of the coronavirus pandemic. Meanwhile, the Trump administration has stepped up a feud over Beijing’s industrial ambitions by tightening controls on use of U.S. technology by tech giant Huawei.
Investors are "trying to make heads or tails of the recent China trade spats with the U.S. and Australia,” Stephen Innes of AxiCorp said in a report.
In Europe, the FTSE 100 in London lost 0.8% to 6,018 and Frankfurt's DAX sank 1.4% to 11,070. The CAC 40 in France declined 1% to 4,452.
On Wall Street, the futures for the benchmark S&P 500 index and for the Dow Jones Industrial Average both lost 0.6%.
In Asia, the Shanghai Composite Index lost 0.6% to 2,867.92 and the Nikkei 225 in Tokyo declined 0.2% to 20,552.31. The Hang Seng in Hong Kong lost 0.5% to 24,280.03.
The Kospi in Seoul gained 0.4% to 1,998.31 and Australia’s S&P-ASX 200 lost 0.4% to 5,550.40. India's Sensex rose 0.7% to 31,036.60. New Zealand was off 0.5% and Singapore lost 0.1%.
U.S. stocks have been spurred higher by hopes for a potential vaccine and optimism the economy will recover in the second half as businesses reopen and stay-at-home orders are relaxed.
Investors are looking to Premier Li Keqiang’s speech to China’s ceremonial legislature Friday for details of Beijing’s spending plans to speed up economic recovery.
China was the first economy to begin reopening in March but has yet to joint the United States, Japan and other major governments in announcing stimulus spending plans. Chinese manufacturing has rebounded but consumer spending, the main growth driver, is weak.
Forecasters expect Beijing to channel extra money into job-creation efforts to head off a surge in unemployment and put money in consumers’ pockets.
“Renewed trade tensions between the U.S. and China could weigh on markets in the coming months,” Esty Dwek of Natixis IM said in a report. “Higher volatility is likely, especially as ‘tough on China’ will clearly be a large part of Trump’s re-election campaign.”
In energy markets, benchmark U.S. crude rose 76 cents to $34.25 per barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.53 on Wednesday to $33.49. Brent crude added 75 cents to $36.50 per barrel in London. It rose $1.10 the previous session to $35.75.
The price of oil has made a comeback this month as producing nations cut output and the gradual reopening of economies drove up demand. Crude started the year at about $60 a barrel but plummeted as demand sank due to travel and business shutdowns.
The dollar gained to 107.75 yen from Wednesday’s 107.71 yen. The euro advanced to $1.0994 from $1.0960.