US Stocks Fall On Weak Data, Trade Worries

Wall Street stocks fell on Friday following lacklustre US economic data and reports the Trump administration is weighing new restrictions on US investment in China.

Stocks took a sharp drop after reports the White House is considering imposing limits on American investment in China and in Chinese assets, including delisting Chinese companies from US stock markets.

In addition, data reports on Friday showed a sharp decline in US consumer spending in August and weak demand for big-ticket manufacturing goods, suggesting a hit to the economy from President Donald Trump's trade war with China.

The Dow Jones finished at 26,820, down 0.3 percent, after it recouped some losses from earlier in the session.

The S&P 500 shed 0.5 percent to close the day at 2,961, while the Nasdaq fell 1.1 percent to end at 7,939.

Equities have fluctuated this week following shifting signals from Beijing and Washington, falling after Trump took a strident line in a United Nations address, but rallying on more upbeat comments a day later and after China said it would buy US soybeans.

But Hu Xijun, the editor of China's state-controlled Global Times tabloid said in a tweet on Friday that the agriculture purchases "signalled China's goodwill, not concessions." And he warned that "real progress in trade talks" would be needed to sustain the purchases.

The trade war has hung over stocks for more than a year.

Gregori Volokhine, a strategist for Meeschaert Financial Services, told the AFP news agency the reports of additional restrictions on China appeared to be part of the Trump administration's bargaining strategy.

Among individual companies, Micron Technology sank 11.1 percent after it projected earnings and gross profit margins well below analyst expectations. Some other large semiconductor stocks also fell.

But Wells Fargo shot up 3.8 percent after tapping Charles Scharf to take over as its new chief executive. Scharf, currently chief of Bank of New York Mellon, previously worked as chief executive at Visa and in senior roles at JPMorgan Chase.

Bank of New York Mellon tumbled 4.5 percent.

US shares of Latam Airlines Group surged 31 percent after Delta Air Lines announced it would acquire a 20 percent stake in South American carrier Latam Airlines Group for US$1.9 billion. Delta shed 0.9 percent. (AFP)