Stocks teeter as Beijing seeks to tighten grip on Hong Kong

China is cheating on Obama-era stock market deal: John Solomon

Fox Business contributor John Solomon discusses Chinese companies taking advantage of an Obama-era stock market deal. 

U.S. equity markets slipped Friday as investors weighed Chinese President Xi JInping's efforts to tighten his grip over Hong Kong ahead of the Memorial Day weekend.

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The Dow Jones fell 134 points, or 0.55 percent, in the opening minutes of trading while the S&P 500 dropped 0.29 percent. The tech-heavy Nasdaq Composite inched up 0.03 percent.

Ticker Security Last Change Change %
I:DJI DOW JONES AVERAGES 24364.73 -109.39 -0.45%
SP500 S&P 500 2936.92 -11.59 -0.39%
I:COMP NASDAQ COMPOSITE INDEX 9268.426404 -16.45 -0.18%

Beijing said Friday it would forego gross domestic product targets as it tries to revive its economy from the damage caused by the COVID-19 pandemic and that it would consider a national security bill bypassing Hong Kong’s legislature.

Hong Kong’s Hang Seng index plunged 5.56 percent on the news.

ANALYSIS RAISES QUESTIONS ABOUT CORONAVIRUS SHUTDOWN'S EFFECTIVENESS

Looking at stocks, Chinese companies listed in the U.S. lagged, with JD.com and Baidu under pressure.

Ticker Security Last Change Change %
JD JD.COM INC 50.74 -1.83 -3.49%
BIDU BAIDU INC. 103.13 -6.90 -6.27%
BABA ALIBABA GROUP HOLDING LTD 202.68 -9.48 -4.47%

Alibaba reported sales rose 22 percent from a year ago as the number of users reached 960 million globally. The e-commerce giant’s fourth-quarter profit sank 88 percent as investments in other publicly traded companies soured.

HONG KONG BANKERS FEAR NEW SECURITY LAWS WILL CAUSE CAPITAL FLIGHT

Deere & Co.’s quarterly profit plunged 41 percent as the COVID-19 pandemic disrupted operations at the end of March.

Foot Locker reported earnings and revenue that fell short of estimates as comparable sales plunged 43 percent during the pandemic. The retailer suspended its 38-cent dividend.

Ticker Security Last Change Change %
DE DEERE & COMPANY 144.24 +1.43 +1.00%
FL FOOT LOCKER 27.05 -2.27 -7.73%

Meanwhile, International Business Machine is eliminating thousands of jobs after CEO Arvind Krishna pledged earlier this month the company would not cut its dividend.

Lululemon has reopened 150 stores and plans on opening about 200 more locations over the next two weeks. The retailer said it will adopt a cashless payment experience wherever possible.

Ticker Security Last Change Change %
IBM INTERNATIONAL BUSINESS MACHINES CORP. 117.77 -1.35 -1.13%
LULU LULULEMON ATHLETICA INC. 271.29 +3.76 +1.41%

West Texas Intermediate crude oil sank 5.66 percent to $32 a barrel, and gold advanced 0.84 percent to $1,736 an ounce.

U.S. Treasurys rallied, lowering the yield on the 10-year note by 3.3 basis points to 0.644 percent.

Britain’s FTSE fell 0.33 percent in Europe, while Germany’s DAX and France’s CAC rose 0.55 percent and 0.57 percent, respectively.

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Asian markets outside of Hong Kong were also lower, with China’s Shanghai Composite sliding 1.89 percent and Japan’s Nikkei losing 0.8 percent.

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