Stocks opened to early losses Monday as investors continued to react to the escalated trade standoff between the U.S. and China.
Oil prices rebounded. Chip stocks saw some early selling after a downgrade to Intel (INTC). China stocks buzzed with activity, led by JD.com (JD), following announcement of a $550 million deal with Alphabet's (GOOGL) Google unit.
XThe Dow Jones industrial average fell 1% at the starting bell. Intel notched the index's heaviest early decline. The S&P 500 futures dropped 0.8%.
The Nasdaq Composite shed 0.9%. Biogen (BIIB) and Intel absorbed the hardest hits among Nasdaq 100 stock futures. Apple (AAPL) dropped 0.6% and all four FANG stock tech leaders posted early declines. JD.com topped the Nasdaq 100 in premarket trade.
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Global markets also continued to be rattled. Benchmark indexes across China and Japan booked moderate losses Monday. In Europe, Frankfurt's DAX was down 1.4% and the CAC-40 in Paris showed a 1.3% loss in afternoon trade
Economic News: Builder Confidence, Oil Prices
The June builders' confidence index from the National Association of Home Builders is set for release at 10 a.m. ET. Atlanta Federal Reserve Bank President Raphael Bostic speaks at 1 p.m. ET.
Oil prices will be in focus ahead of Friday's meeting of the Organization of Petroleum Exporting Countries, and as markets continued to react to China's threat to place tariffs on imported U.S. oil. Saudi Arabia, Russia and others will look at the group's first serious readjustment of production quotas in nearly two years. Oil prices Monday were mixed, with Europe's Brent crude benchmark rebounding 1.2% from sharp losses on Friday. U.S. benchmark West Texas Intermediate reversed its early losses and rose 0.2%, climbing back above $65 per barrel.
JD.com Surges on Google Deal, China IPOs Lag
A number of China-based stocks were busy in early trade. Online retail heavyweight JD.com opened to a 1.8% gain.. Alphabet's Google announced it would invest $550 million in a partnership with the China-based e-commerce giant. Google received 27 million newly issued class A ordinary shares. The partnership aims to improve online shopping conduits in areas including Southeast Asia, and it will give JD.com increased access to consumers in the U.S. and Europe.
JD.com shares have rallied for two straight weeks, building the right side to a cup base pattern with a potential buy point at 50.78, according to MarketSmith.
Alphabet shares were down 0.5% in early trade. The stock ended Friday below an 1177.10 entry in a four-month double-base pattern.
Also, two of three China-based IPOs shook off premarket losses and advanced in early trade. Huya (HUYA) rose 0.1% and iQiyi (IQ) added 0.3%, while Bilibili (BILI) dropped 2.3%. Pullbacks by these three stocks could be positive for investors.
China Biologic Product Holdings (CBPO) shot up more than 23%. Vipshop Holdings (VIPS) climbed 1.8%.
Intel Downgrade, Biogen Drops On PTC Trial Results
Chip stocks were under some early pressure as markets assessed the impact of U.S.-China trade tariffs. In addition, Intel received a downgrade, to underperform, from market perform. The stock dropped 4%, the worst early loss among Dow industrial stocks and on the Philadelphia Semiconductor Index. Also on the Philly chip index, Netherlands-based ASML Holdings (ASML) slumped 2.7%, Marvel Technologies (MRVL) dumped 1.9%.
Biogen fell 5.4%, while PTC Therapeutics (PTCT) rocketed 30% higher. PTC on Saturday announced positive interim trial results for its risdiplam treatment of babies with Type 1 Spinal Muscular Atrophy. Biogen shares have been struggling against resistance at their 10-week moving average. PTC shares are extended, up 16% from a May 31 breakout from a cup-with-handle base.
Earnings Reports: FedEx, Oracle,Winnebago
On the earnings front, FedEx (FDX) and Oracle (ORCL) report after Tuesday's close, Micron Technology (MU) and Winnebago (WGO) on Wednesday, and Kroger (KG), Carmax (KMX) and Smart Global (SGH) before the end of the week.
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