Persistent China Disruptions Drag World Markets Down, Oil Drops to 11-month Low

Barry Adams
28 Nov, 2022
New York City

Stocks on Wall Street opened lower after protests spread to more cities in China, prompting worries of crackdown and disrupting supply chains. 

Global companies are increasingly shifting manufacturing away from China as zero-Covid linked supply chains are likely to persist. 

After three years of coronavirus pandemic, China, the only nation among large economies, is still struggling with rising infections. 

Coronavirus infections rose to a daily high of 44,000 but reported deaths in China are still less than a handful. 

China's zero-Covid strategy has now put more than 400 million people under strict lockdown conditions and several cities are facing stricter mobility restrictions for more than three months. 

The S&P 500 index declined 0.8% to 3,993.86 and the Nasdaq Composite index dropped 0.6% to 11,152.74. 

Crude oil rose 50 cents to $77.78 s barrel and natural gas declined 35 cents to $6.67 a thermal unit. 

The yield on 2-year Treasury notes fell to 4.45%, 10-year Treasury notes eased to 3.69% and 30-year Treasury bonds inched lower to 3.74%. 

 

Stock Movers 

Apple Inc declined 2.2% to  $144.94 on the worries that the growing unrest in China and at its main contractor Foxconn may create a shortage of iPhone Pro models. 

iPhone shipments fell 17% to 8.4 million in October from Henan province, China's customs data showed on Thursday. 

Foxconn's mega-complex is based in its capital city Zhengzhou, Henan province where thousands of employees are forced to stay in the factory compounds for more than two months. 

Energy producers declined after WTI crude oil prices fell to a 11-month low on China-demand worries.

Exxon Mobil, Chevron, Marathon Oil, Valero, Occidental Petroleum, Hess and Baker Hughes declined between 1% and 3%. 

Casino operators increased after China granted provisional licenses to keep operation running in gambling center Macau. 

Las Vegas Sands, Wynn Resort, Melco and MGM gained between 0.5% and 6.5%. 

Taboola.com Limited soared 47% to $2.70 after Yahoo agreed to acquire a minority stake of 26% in the advertising company. 

Yahoo also signed a 30-year contract with Taboola to power its native advertising on all sites operated by the publishing company.