The US auto workers union ordered simultaneous strikes at three factories of the "Big Three" car manufacturers for the first time ever
London (AFP) - Wall Street indices retreated on Friday as a historic strike in the US auto sector dampened the mood after forecast-busting Chinese economic data sent Asian and European stock markets higher.
The Down Jones Industrial Average was down 0.5 percent while the S&P 500 fell 0.8 percent and the tech-heavy Nasdaq slipped 1.3 percent in late morning deals.
In an unprecedented move, the United Auto Workers’ union launched simultaneous strikes just after midnight at three factories of the “Big Three” car manufacturers.
The stoppages were decided after contract negotiations with General Motors, Ford and Jeep-owner Stellantis failed to produce an agreement on wage hikes before a union deadline.
“This is not a surprise to the market given the tenor of remarks leading up to the deadline, but that doesn’t mean it is a good thing for the economy,” Patrick O’Hare, market analyst at Briefing.com, said.
“It will become less of a good thing the longer it persists given the reach and importance of auto manufacturing supply chains,” he added.
The strike involves 12,700 workers but the 150,000-strong union warned that the industrial action could spread if its demands are not met.
President Joe Biden, who has sought to lock up support from organised labour for his re-election effort, called union leaders on Thursday and was due to make public remarks on the labour strife on Friday.
Investors are also gearing up for the US Federal Reserve’s latest interest rate decision on Wednesday after the European Central Bank signalled this week that its own rate-hike campaign may be over.
Data on Friday showed US industrial production kept expanding in August, beating expectations even though the pace of the increase slowed due to sluggish manufacturing growth.
The figures will give the Fed additional information as it weighs another hike to its key lending rate to cool above-target inflation.
However, traders and analysts expect the US central bank to announce it is holding rates steady to give policymakers more time to assess the health of the world’s largest economy.
- ‘Upbeat mood’ -
Sentiment was more positive among traders in Asia and Europe after data showed Chinese retail sales and industrial production jumped more than expected last month.
The figures were the latest suggesting the economy could be stabilising after months of sluggishness, with inflation, trade and services all showing a marked improvement in recent weeks.
The Paris CAC 40 index led the way in Europe but it pared back some gains after Wall Street opened lower, finishing the day just under one percent higher.
Tokyo closed up more than one percent, helped by a rally in tech investor SoftBank that came after the firm’s chip design unit Arm soared 25 percent on its trading debut in New York a day earlier.
Equities were “building on strong gains in yesterday’s session after the European Central Bank signalled its hiking cycle is over,” said Neil Wilson, chief market analyst at Finalto.
The ECB gave a strong hint it may be done with the monetary tightening campaign on Thursday after pushing rates to their highest level since the introduction of the euro in 1999.
The Chinese data also “helped secure the upbeat mood,” Wilson said.
- Key figures around 1545 GMT -
New York - Dow: DOWN 0.5 percent at 34,737.46 points
London - FTSE 100: UP 0.5 percent at 7,711.38 (close)
Frankfurt - DAX: UP 0.6 percent at 15,893.53 (close)
Paris - CAC 40: UP 1.0 percent at 7,378.82 (close)
EURO STOXX 50: UP 0.4 percent at 4,295.05
Tokyo - Nikkei 225: UP 1.1 percent at 33,533.09 (close)
Hong Kong - Hang Seng Index: UP 0.8 percent at 18,182.89 (close)
Shanghai - Composite: DOWN 0.3 percent at 3,117.74 (close)
Euro/dollar: UP at $1.0668 from $1.0645 on Thursday
Pound/dollar: DOWN at $1.2391 from $1.2409
Dollar/yen: UP at 147.85 yen from 147.46 yen
Euro/pound: UP at 86.10 pence from 85.73 pence
Brent North Sea crude: FLAT at $93.73 per barrel
West Texas Intermediate: UP 0.5 percent at $90.63 per barrel