Stock Market Open: US Shares Mixed On China Trade Deal Hopes, Impeachment Worries

U.S. markets turned lower Thursday as hopes for an early U.S.-China trade deal and turmoil at the European Central Bank were coupled with concerns over the U.S. impeachment inquiry.

The Dow Jones Industrial Average was off more than 46 points or 0.17% to 26,924.24 in early afternoonb trading. The S&P 500 fell nearly 9 points or 0.29% to 2,976.232 points or 0.07% to 2,982 and the Nasdaq Composite fell nearly 41 points or 0.63% to 8,026.59.

Final second quarter U.S. gross domestic product estimates released Thursday by the U.S. Bureau of Economic Analysis kept the growth figure at 2% for the second quarter, revising the initial estimate down 1 tick. Real GDP in the first quarter was 3.1%.

The Labor Department reported initial jobless claims rose last week to 213,000, up 3,000 from the previous week. The four-week average was 212,000, down 750 from the previous week’s revised average.

“The revision primarily reflected downward revisions to state and local government spending, exports, private inventory investment and residential investment, which were partially offset by rises to personal consumption expenditures.

China Thursday confirmed it made a “considerable” soybean buy ahead of next month’s high-level trade talks with the U.S. The Ministry of Commerce confirmed the transaction at its weekly press conference. The action is seen as an olive branch aimed at bringing the 15-month-old trade war to a close.

“It is hoped that the two sides will meet half way and find a mutually beneficial and win-win approach based on equality and mutual respect,” ministry spokesman Gao Feng said.

Deputy-level negotiations were held last week in Washington. Feng described those discussions as “constructive.”

Feng’s remarks followed word from President Trump that he thinks an agreement would be reached “sooner” than expected despite his criticism Tuesday of China’s economic model, which he said relies in part on currency manipulation and product dumping.

In Europe, German Chancellor Angela Merkel urged “sensible” reforms and financial policies to keep the European Central Bank from becoming overburdened. ECB Executive Board member Sabine Lautenschlager, the most senior member, stepped down as Christine Lagarde assumed the reigns, succeeding Mario Draghi.

Latenschlager is ending her tenure two years early, underscoring the deep divisions over the ECB’s monetary policy. In August, she expressed her opposition to the aggressive stimulus package adopted by the central bank, saying bond purchases should be used only in an emergency such as a deflation cycle.

Testimony by acting Director of National Intelligence Joseph Maguire overshadowed the trading day. The testimony followed release of the whistleblower complaint centered on Trump’s July 25 phone call to Ukraine President Volodymyr Zelensky in which Trump asked his counterpart to work with Rudy Giuliani and Attorney General William Barr to investigate former U.S. Vice President Joe Biden, who is among the leading contenders for the Democratic presidential nomination.

On global markets, Asian stocks closed mixed. Hong Kong’s Hang Seng index rose 0.37% while Japan’s Nikkei 225 added 0.13%. China’s Shanghai Compsite fell 0.89% and Australia’s S&P/ASX lost 0.49%.

European markets closed higher. The London FTSE was up 0.84% while the German DAX added 0.44% and the French CAC rose 0.66%.

The British pound was off 0.02% against the dollar while the euro fell 0.11%. The U.S. dollar index gained 0.05%.

Oil futures declined. Crude oil fell to $56.01 a barrel, off 0.85%. Brend crude dropped to $61.15 a barrel, down 0.46%. Gold was higher while silver fell.