But China’s growth has slowed and Beijing devalued the yuan this week to calm domestic markets that have become extremely volatile. The surprise move earlier this week to loosen the mechanism that controls the yuan and send the currency lower reverberated through global markets but the turmoil is now abating.
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U.S. stocks finished flat on Thursday as a drop in energy shares offset a rebound in retail sales and stronger-than-expected Cisco results.
Individual companies whose sales have significant exposure to China have been hit hard, including consumer names like YUM Brands Inc. and casino resorts such as Wynn Resorts Ltd. and Las Vegas Sands Corp. The tech-heavy Nasdaq spent much of the day struggling to clear the psychologically significant level of 5,000 reached back in March. Thursday was little different, with shares bouncing higher in afternoon trade on little news and relatively thin volume, traders said. Ablin said the market’s sudden turns reflect the uncertainty surrounding China’s actions.
The Dow Jones industrial average lost 0.33 of a point to close at 17,402.51, while the Nasdaq composite inched up 7.60 points, or 0.2 percent, to 5,044.39.
Said Stephen Freedman, senior investment strategist at UBS Wealth Management: “This week, it has really been all about China’s move and trying to interpret what its broader impact might be”. He also wrote a note about Apple (AAPL) exposure to China and the effects of the yuan drop. Many investors say that even with a slowdown in China, which has been discussed for months, the U.S. economy remains on track to expand moderately. “And is this going to spread their weakness to other countries?” Yahoo, which has a large stake in Alibaba, fell 5.6 percent. Australia’s S&P/ASX 200 Index gained 0.2% and New Zealand’s NZX 50 Index slid 0.2%. It ended up 1.5% and was the biggest positive factor for all three major indexes.
The Chinese reduced the value of their currency this week in relation to the US Dollar, which should have repercussions in both markets.
While retail sales bested analyst expectations, a batch of earnings from large companies in the sector sent conflicting signals. Brent crude, an worldwide benchmark, fell 44 cents to $49.22 in London.
Tesla rose 2.2 percent to $243.35 after it said it plans to raise about $500 million through a share sale, with CEO Elon Musk buying shares worth up to $20 million.
Apple, which has been mostly falling the last three weeks, rose 1.6 percent, while energy stocks like Dow member ExxonMobil (+1.7 percent), ConocoPhillips (+2.3 percent) and Apache (+3.2 percent) gained on higher oil prices.
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AP Moeller Maersk A/S surged 6.8% to 12,320 kronor after the Denmark-based shipping and logistics company reported revenues in the first-half ending in June declined 11% to $21.07 billion from $23.69 billion in a year ago period.
