By Geoffrey Smith
Investing.com -- U.S. stock markets opened lower again on Friday as selling continued amid concerns that the U.S. economy is stalling and that the country is gearing up for a long confrontation with China.
By 9:40 AM ET (1340 GMT). the Dow Jones Industrial Average was down 171 points, or 0.6% at 26,482 points. The S&P 500 fell 1% but bounced to be down only 0.6%, while the Nasdaq Composite fell 2.0%.
The market was unsettled not only by weak jobless data and fresh figures showing the Covid-19 virus still rampant throughout the country, but also by comments from President Donald Trump at his newly-resumed press briefing on Thursday that appeared to prepare the ground for ripping up the phased trade deal with China.
Trump said that the deal "means less" to him now than it did at the start of the year, due to China's role in spreading the virus. His comments came on the back of a witheringly critical speech of China by Secretary of State Mike Pompeo, which called an end to 50 years of what he styled as naive engagement with the country. China on Friday ordered the U.S. to close its consulate in Chengdu, in retaliation for the U.S. ordering the closure of China's in Houston earlier in the week.
Domestic policy concerns also weighed on the market in addition to foreign policy ones, as Senate Republicans failed to agree a common line with the administration and with each other on how to shape the next round of economic support measures. The proposals from Senate Leader Mitch McConnell are now unlikely to be presented before Monday, losing a valuable couple of days' negotiating time as the clock runs down on the current, temporary, support for over 16 million unemployed.
The most brutal moves in individual stocks were in tech, which had been the recipient of the hottest money in previous sessions. Intel (NASDAQ:INTC) stock fell 17% after it announced another delay to the start of production of its next-generation chips, the 7-nanometer standard in which rival AMD is already established. Advanced Micro Devices (NASDAQ:AMD) stock rose 10.4%, while Taiwan Semiconductor Manufacturing (NYSE:TSM) rose 10.2%.
Verizon (NYSE:VZ) stock outperformed with a 2.8% rise after it posted surprisingly strong results for the second quarter, adding nearly three times as many new users as expected.
Tesla (NASDAQ:TSLA) stock, which is vulnerable to profit-taking after rising over 40% in the last month, slipped 6.8% amid ongoing suspicion that the company's financial health is less robust than its quarterly figures suggested. In addition to its dependence on the sale of emissions credits for keeping the bottom line positive, analysts also pointed to two straight quarters of lower average selling prices, an unsustainable lockdown-driven drop in operating costs and its reliance on a Chinese market which may be vulnerable to political shenanigans.
Elsewhere, Gold Futures finally cracked the $1,900 mark for the first time in nine years as bond yields plumbed new depths. U.S. Crude Oil Futures also edged lower amid mounting evidence that the tightening of restrictive public health measures is choking off the rebound in U.S. fuel demand.