Stocks opened deep in negative territory on reports that the CFO of Chinese telecommunications company Huawei was arrested in Canada at the request of the U.S. for violations of Iranian sanctions. The arrest opened a new front in the U.S.-China trade war, which had seemed to turn a positive corner following the G20 meeting. The markets continued to lose ground during the morning session, but the averages pared a good portion of their losses prior to the close. The recovery may have been aided by a Wall Street Journal recap of recent interviews and public statements from Federal Reserve officials that stated that the central bank members are considering whether to signal a "new wait-and-see" approach after a likely rate hike in December.
ECONOMIC EVENTS: In the U.S.:
COMPANY NEWS: Huawei Technologies CFO Meng Wanzhou, one of the vice chairs on the Chinese company's board and the daughter of company founder Ren Zhengfei, was arrested in Canada on December 1 at the request of U.S. authorities and now faces extradition to the U.S. on suspicion she violated U.S. trade sanctions against Iran, according to media reports. Sources previously said U.S. authorities were probing Huawei since "at least" 2016 for shipping U.S.-origin products to Iran and other countries in violation of U.S. export and sanctions laws. Meanwhile, Reuters later reported that the U.S. is looking into Huawei's use of HSBC (HSBC) to make illegal transactions involving Iran. The Wall Street Journal reported, however, that the British bank is not a target of the investigation.
Facebook (FB) has been in the spotlight again this week after the U.K. parliament released 250 pages of seized Facebook and Mark Zuckerberg emails, which suggest that the social media giant let companies have special access to user data if they spent big on advertising.
Lam Research (LRCX) announced yesterday while the market was closed for trading that the board of directors has accepted Martin Anstice's resignation as chief executive officer and a member of the board as the company investigates allegations against Anstice of misconduct in the workplace and conduct inconsistent with the company's core values. Lam said that the alleged conduct did not involve financial misconduct, nor did it relate to questions regarding the integrity of the company's financial systems or controls, and reaffirmed its previous guidance.
MAJOR MOVERS: Among the noteworthy gainers was Del Frisco's (DFRG), which rose 16% after shareholder Engaged Capital urged the board to explore strategic alternatives. Also higher was TheStreet (TST), which gained 35% after announcing that it has entered into a definitive agreement to sell its institutional business units, The Deal and BoardEx, for $87.3M to Euromoney Institutional Investor.
Among the notable losers was NeoPhotonics (NPTN), which fell 16% after B. Riley FBR analyst Dave Kang downgraded the stock to Neutral from Buy on Huawei uncertainty. Also lower was Signet Jewelers (SIG), which slid 18% after reporting quarterly results.
INDEXES: The Dow fell 79.40, or 0.32%, to 24,947.67, the Nasdaq gained 29.83, or 0.42%, to 7,188.26 , and the S&P 500 declined 4.11, or 0.15%, to 2,695.95.
HSBC
-1.54 (-3.62%)
Ticker changed to META
+1.67 (+1.21%)
Lam Research
-3.76 (-2.51%)
Del Frisco's
+1.11 (+16.35%)
TheStreet
+0.505 (+33.11%)
NeoPhotonics
-1.25 (-16.17%)
Signet Jewelers
-9 (-17.98%)