By Associated Press and Marketwatch
BEIJING (AP) — Stocks logged modest gains Friday in Asia after a lackluster overnight session on Wall Street ended with the market’s third straight drop.
Reports suggesting Chinese Vice Premier Liu He, Beijing’s lead trade negotiator, has invited U.S. officials to China for talks helped alleviate worries over progress in resolving the tariff war between the two largest economies.
On Thursday, China’s Commerce Ministry sought to bat away rumors that the trade talks were in trouble, with a spokesman saying Beijing was committed to continuing discussions on core concerns.
Japan’s Nikkei 225 index /zigman2/quotes/210597971/delayed JP:NIK -0.44% gained 0.4% to 23,130.31, while the Hang Seng in Hong Kong /zigman2/quotes/210598030/delayed HK:HSI -1.38% picked up 0.3% to 26,536.83. South Korea’s Kospi /zigman2/quotes/210598069/delayed KR:180721 -1.09% edged 0.2% higher to 2,100.38 and the S&P ASX 200 /zigman2/quotes/210598100/delayed AU:XJO -0.03% in Australia advanced 0.5% to 6,707.90. The Shanghai Composite index /zigman2/quotes/210598127/delayed CN:SHCOMP +0.37% lost 0.6% to 2,886.47, while shares rose in Bangkok and Singapore but fell in Taiwan and Jakarta.
Overnight, stocks closed modestly lower on Wall Street in the third straight day of declines after a mostly listless day of trading.
Losses in technology stocks, companies that rely on consumer spending and other sectors outweighed gains elsewhere in the market.
Energy sector stocks were the biggest winners, benefiting from another pickup in crude oil prices. Health care and communication services companies also rose.
Investors have turned cautious this week amid concerns that the U.S. and China will fail to make a trade deal before the year is over.
The world’s largest economies have been negotiating a resolution to their trade war ahead of new tariffs set to hit key consumer goods on Dec. 15. Investors have been hoping for a deal before that happens, as the tariffs would increase prices on smartphones, laptops and many common household goods.
“That Dec. 15 deadline on tariffs still weighs on the market,” said Quincy Krosby, chief market strategist at Prudential Financial. “The market needs a sense that there won’t be an escalation in the trade war.”
The benchmark S&P 500 index /zigman2/quotes/210599714/realtime SPX +1.59% dropped 0.2% to 3,103.54 and is on track to snap a six-week winning streak. The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +1.78% fell 0.2% to 27,766.29.
The Nasdaq /zigman2/quotes/210598365/realtime COMP +2.21% slid 0.2% to 8,506.21 while the Russell 2000 index /zigman2/quotes/210598147/delayed RUT +0.77% of smaller company stocks lost 0.5%, to 1,583.96.
Stocks are likely to remain choppy and risky as long as the trade war and threat of new tariffs looms over Wall Street, said Barry Bannister, head of institutional equity strategy at Stifel.
“We don’t want to see tariffs on consumer goods that get passed on directly to retail purchasers because they’re the last leg on which the economy is standing right now,” Bannister said.
Bannister warned that the market could be in for a significant decline before the end of the year if the U.S. and China can’t make progress. He also said the risk of a larger recession has not disappeared.
Technology stocks took some of the heaviest losses Thursday. Many chipmakers and companies that make hardware rely on China for sales and supply chains. Advanced Micro Devices /zigman2/quotes/208144392/composite AMD +2.03% slid 3.6% and Lam Research /zigman2/quotes/208077897/composite LRCX +3.48% fell 3.7%.
Consumer product makers also fell broadly. Kraft Heinz /zigman2/quotes/203625533/composite KHC +0.60% dropped 2.7%.
In energy trading Friday, benchmark U.S. crude oil /zigman2/quotes/209723049/delayed CL00 -1.38% lost 39 cents to $58.19 per barrel in electronic trading on the New York Mercantile Exchange. It rose $1.57 to settle at $58.58 a barrel on Thursday. Brent crude oil , the international standard, declined 37 cents to $63.60 per barrel.
The dollar /zigman2/quotes/210561789/realtime/sampled USDJPY +0.2970% was flat at 108.63 Japanese yen. The euro /zigman2/quotes/210561242/realtime/sampled EURUSD -0.2653% rose to $1.1065 from $1.1061 on Thursday.
Among individual stocks, Yahoo Japan parent Z Holdings surged in Tokyo trading, while Nintendo sank after a downgrade by Morgan Stanley. In Hong Kong, oil producer CNOOC /zigman2/quotes/203421416/delayed HK:883 -3.16% edged up while New World Development /zigman2/quotes/202357413/delayed HK:17 -0.05% declined. Samsung /zigman2/quotes/209800866/delayed KR:005930 -2.91% gained in South Korea, while in Australia, BHP /zigman2/quotes/201448516/delayed AU:BHP +1.26% rose and Westpac /zigman2/quotes/203084975/delayed AU:WBC -1.57% continued its fall.