Roundup: U.S. stocks extend losses amid Mexico tariffs shock, tepid data

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NEW YORK, June 1 (Xinhua) -- U.S. stocks wrapped up the week on a grim note, as Wall Street was rattled by Washington's tariff bombshell at Mexico and digested a batch of tepid data, fueling concerns over U.S. economy.

In the week ending May 31, the Dow fell 3.04 percent, the S&P 500 was down 2.64 percent, and the Nasdaq lost 2.42 percent.

This holiday-shortened week marked negative trading sessions for the market with a low start and a worrying ending.

On Friday, the three major indexes ended sharply lower, closing the last week of May in deep red, after Washington decided to turn its tariff gun on Mexico, pushing Wall Street into a bearish and risk-off mode.

The Dow Jones Industrial Average fell 354.84 points, or 1.41 percent, to 24,815.04. The S&P 500 fell 36.80 points, or 1.32 percent, to 2,752.06. The Nasdaq Composite Index fell 114.57 points, or 1.51 percent, to 7,453.15.

Companies that depend heavily on supply chains in Mexico took a beating, as U.S. President Donald Trump threatened on Thursday to slap a five percent tariff on all Mexican imports from June 10, which would reach 25 percent by October if Mexico dissatisfies Washington over immigration issues.

Auto stocks and retail stocks were the worst performers reeling from the intensifying U.S. trade fights with Mexico and China.

Shares of General Motors and Ford Motor tumbled 4.25 percent and nearly 2.3 percent respectively. Shares of Walmart also dropped over 0.7 percent.

Yet shares of Uber rose over 1.5 percent, as the company reported stronger-than-expected revenue for the first quarter after Thursday's market close, which rose 20 percent year on year.

The earnings report caught much market attention, as it was the first one since the ride-sharing service provider went public on the U.S. market.

Throughout the week, investors were also closely following up on changing yields in U.S. long-term government debt yields, which strengthened investors' angst over U.S. economic outlook and lingering U.S.-China trade frictions.

Yields of U.S. 10-year and five-year Treasury bonds pulled back significantly since Wednesday, both sinking below the three-month note yield, creating once again a so-called inverted yield curve, which is widely taken as an economic recession precursor.

The around 2.2-2.3 percent yields of the 10-year note this week marked its lowest level since September 2017. So far, the inversion has been on pace for its deepest level in almost 12 years.

Meanwhile, Wall Street digested a set of key economic data this week.

On the economic front, U.S. consumer sentiment was also dented by the long-lasting trade frictions in the last two weeks of May.

The final index of consumer sentiment was 100 in May, down from an initial estimate of 102.4, said the University of Michigan in its latest survey released on Friday.

Though the index rose from 97.2 in April, consumer confidence was "significantly eroded" due to unfavorable references to tariffs, said the university, which was "spontaneously mentioned by 35 percent of all consumers in the last two weeks of May."

The U.S. personal consumption expenditures (PCE) price index increased 0.3 percent in April, the Bureau of Economic Analysis said on Friday. Excluding food and energy, the PCE price index increased 0.2 percent.

According to the report, in the 12 months through April, the so-called core PCE price index, a preferred inflation gauge by the Federal Reserve, was up 1.6 percent, below the central bank's target of 2 percent.

U.S. real gross domestic product (GDP) increased at an annual rate of 3.1 percent in the first quarter, according to the second estimate released by the Bureau of Economic Analysis on Thursday.

Based on more complete source data, the first-quarter reading came higher than the 2.2 percent in the fourth quarter of 2018, yet was revised lower than the 3.2 percent of the first estimate issued last month.

Besides, U.S. initial claims, or the number of people applying for jobless benefits, rose to 215,000 in the week ending May 25, a slight increase of 3,000 to from the previous week, said the Labor Department on Thursday.

The advance estimate of international trade deficit reached 72.1 billion U.S. dollars in April, up 0.2 billion dollars from that of March, said the U.S. Census Bureau in its monthly advance economic indicators report released Thursday.

Exports of goods for April were 134.6 billion dollars, 5.9 billion dollars less than March exports. Imports of goods for April also fell 5.6 billion to 206.7 billion dollars from March. Enditem

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