US stocks fall amid rising China tensions

he Fearless Girl statue stands in front of the New York Stock Exchange. PHOTO: AFP

NEW YORK (AFP) - Wall Street stocks fell for a second session in a row on Friday (July 24) on rising US-China tensions and worries that equities have gotten overvalued.

Beijing ordered the US consulate in Chengdu to shut in retaliation for the closure of its own Houston mission.

The move comes amid escalating tensions between the two countries over the coronavirus and China's crackdown on Hong Kong.

Analysts also cited unease over the hefty gains by equities since March despite a highly uncertain US economic outlook due to the coronavirus that has led to many companies refraining from forecasting earnings.

"It's natural that people are starting to re-evaluate their expectations for forward earnings," said FHN Financial Chris Low.

"That gets people thinking about valuation."

The Dow Jones Industrial Average dropped 0.7 per cent to 26,469.89.

The broad-based S&P 500 shed 0.6 per cent to 3,215.63, while the tech-rich Nasdaq Composite Index lost 0.9 per cent at 10,363.18.

Among individual companies, Dow member Intel plunged 16.2 per cent after it announced that its next-generation chips would be delayed by manufacturing problems.

American Express shed 1.4 per cent as it reported an 85 per cent drop in second-quarter profits to US$257 million (S$355 million).

The credit card company set aside US$1.6 billion for bad loans, reflecting "the deterioration of the global macroeconomic outlook."

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