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08-Feb2019

US markets end lower on fears for global growth

The US markets ended in red on Thursday as slashed European growth forecasts and warnings on the US-China trade dispute weighed on the sentiments. Renewed concerns about a US-China trade deal generated selling pressure after a report that President Donald Trump and Chinese President Xi Jinping are highly unlikely to meet before a March 02 deadline. The report comes after White House economic adviser Larry Kudlow told Fox Business the US and China have a pretty sizable distance to go before reaching a trade deal. Besides, worries about the US-China trade talks added to concerns about the global economy raised by the European Commission lowering its eurozone growth forecast. The European Commission slashed its GDP growth forecast for 2019 to 1.3% from 1.9% and lowered its estimate for growth in 2020 to 1.6% from 1.7%. The downgrade reflected external factors, such as trade tensions and the slowdown in emerging markets, notably in China.

On the economic front, first-time claims for US unemployment benefits pulled back in the week ended February 02 after the jump seen in the previous week, according to a report released by the Labor Department. The report said initial jobless claims fell to 234,000, a decrease of 19,000 from the previous week's unrevised level of 253,000. Street had expected jobless claims to drop to 221,000. The smaller-than-expected decrease came after jobless claims rebounded to their highest level since September of 2017 in the previous week. The Labor Department said the less volatile four-week moving average rose to 224,750, an increase of 4,500 from the previous week's unrevised average of 220,250. Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, slid by 42,000 to 1.736 million in the week ended January 26.

Dow Jones Industrial Average dropped 220.77 points or 0.87 percent to 25169.53, S&P 500 declined 25.56 points or 0.94 percent to 2706.05 and Nasdaq was down by 86.93 points or 1.18 percent to 7288.35.


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