Everything was going rosy for a while in the morning with the Dow up a hundred points, then right around 1 pm the Chinese decided to cancel their trip to Montana where they were scheduled to see some of the farms the trade war was impacting.  This was more concerning to the market since, though investors have grown accustomed to the ups and downs triggered by Trump’s comments and tweets, this time it was China’s decision and the market plummeted, losing all the gains and closing down another 159 points. Again, the trade-sensitive stocks were the ones hit the hardest with the chip index in particular taking nearly a 2% dive.  Because of all the unwinding and “witching” of futures and options contracts expiring, volume was artificially elevated to 9.8 billion shares. 

fri  SEPTEMBER 20, 2019 / 4:29 pm 

Wall Street drops after China cancels trip to Montana farmland

Noel Randewich

DJ:  27,094,79  -52.29         NAS:  8,182.88  +5.49          S&P:  3,006.79  +0.06       9/19

DJ:  26,935.07  -159.72       NAS:  8,117.67  -65.21         S&P:  2,992.07  -14.72      9/20

(Reuters) - Wall Street dropped on Friday, and also finished the week lower, after a Chinese agriculture delegation canceled a planned visit to Montana, dampening optimism about U.S.-China trade talks.  The delegates, who had been set to visit U.S. farm states next week, will return to China sooner than originally scheduled, the Montana Farm Bureau said.  Major stock indexes fell into negative territory after the cancellation, which came as trade talks were held in Washington and U.S. President Donald Trump said he wanted a complete trade deal, not just an agreement for China to buy more U.S. agricultural goods. Before the news, the S&P 500 and Dow industrials were in positive territory.

For months, Wall Street has bounced up and down with signs of improvement or deterioration in trade talks, often based on comments or tweets from Trump, a cycle investors have grown accustomed to.  “In this case, it’s a bit more concerning because it’s China making the decision, rather than Trump,” said Willie Delwiche, markets strategist at Baird in Milwaukee.  Trade optimism in recent weeks helped elevate the S&P 500 .SPX to just shy of its all-time high hit in July.  Eight of the 11 major S&P sectors fell on Friday. The S&P 500 consumer discretionary index .SPLRCD and tariff-sensitive S&P 500 information technology index .SPLRCT declined the most, down 1.2% and 1.1%, respectively. The Philadelphia chip index .SOX slid 1.8%.

The Dow Jones Industrial Average .DJI fell 0.59% to end the week at 26,935.07 points, while the S&P 500 .SPX lost 0.49% to 2,992.07.  The Nasdaq Composite .IXIC dropped 0.8% to 8,117.67.  For the week, the S&P 500 fell 0.52%, the Dow lost 1.05% and the Nasdaq declined 0.72%. 

Netflix tumbled 5.5% after CEO Reed Hastings made comments underscoring growing costs and rising competition from Walt Disney Co (DIS.N), Apple Inc (AAPL.O) and other video streaming services.  Adding to Netflix’s woes, Evercore ISI said recent data painted an uncertain picture of the company’s international subscriber growth.  The S&P 500 healthcare index .SPXHC, which has been the worst performing S&P sector this year, clocked the biggest gain among the 11 major sectors, up 0.6%.  Merck & Co (MRK.N) gained 1.4% after the company’s drugs Pifeltro and Delstrigo received FDA approval for use in certain adult patients with HIV-1 who are “virally suppressed.”  Roku Inc (ROKU.O) slumped 19.2% after Pivotal Research started coverage of its shares with a “sell” rating.  Xilinx Inc (XLNX.O) dropped 6.8% after Chief Financial Officer Lorenzo Flores said he would step down, prompting Bank of America Merrill to downgrade the chipmaker to “neutral.” 

Advancing issues outnumbered declining ones on the NYSE by a 1.01-to-1 ratio; on Nasdaq, a 1.03-to-1 ratio favored decliners.  The S&P 500 posted 22 new 52-week highs and no new lows; the Nasdaq Composite recorded 47 new highs and 51 new lows.

With investors unwinding positions in futures and options contracts before they expire, volume on U.S. exchanges was 9.8 billion shares, compared with a 7.1 billion-share average over the last 20 trading days.