Another sign of weakness in China weighs on US stocks

Stocks took small losses Monday after China reported a drop in exports in December, but the market didn’t come close to matching the plunges it took in the last few months.

Indexes in Europe and Asia headed slightly lower after the latest report added more evidence that China’s economy is weakening. Major U.S. indexes fell about 1 percent at the start of trading, but soon recovered much of what they’d lost. Technology companies slumped.

Drugmakers fell after Democrats in the House of Representatives announced an investigation into prescription drug pricing. A strong quarterly report from Citigroup helped bank stocks trade higher.

China’s exports slipped in December, and exports to the U.S. fell 3.5 percent as rising tariffs and broader weakness affected the world’s second-largest economy. Concerns about the Chinese economy and the overall global economy were a major contributor to the market’s plunge in late 2018.

Mark Esposito, president of Esposito Securities, said the calm reaction to the news from China suggests stocks won’t fall further than they did in December.

“That’s a very positive sign that, at least in the short term, we may have found a bottom,” he said. “People lose faith and hope when (the market) drops 20 percent in a very short period like it did.”

The S&P 500 index dropped from late September until the day before Christmas, partly because investors were worried that the global economy was slowing dramatically and could fall into a recession. Since Dec. 26, stocks have regained about half of what they lost in the downturn.

On Monday the S&P 500 fell 13.65 points, or 0.5 percent, to 2,582.61. The Dow Jones Industrial Average fell 230 points Monday morning, but finished with a loss of 86.11 points, or 0.4 percent, to 23,909.84.

The Nasdaq composite retreated 65.56 points, or 0.9 percent, to 6,905.92. The Russell 2000 index of smaller-company stocks shed 14.57 points, or 1 percent, to 1,432.81.

The stock market’s recent rally suggests investors aren’t quite as worried about the global economy or the state of trade talks. They still took a cautious approach to technology companies. Apple lost 1.5 percent to $150. The company’s shares tumbled last month after it said sales in China were falling. Chipmaker Texas Instruments lost 2.3 percent to $96.33.

Also falling was Wynn Resorts, which has two of its three casinos in Macau. It slumped 4.8 percent to $108.10.

A leading House Democrat, Rep. Elijah Cummings, announced a sweeping investigation of the pharmaceutical industry’s pricing practices for drugs that are used to treat conditions including cancer, diabetes, kidney failure and nerve pain.

The Trump administration is pursuing its own plan to lower drug prices by approving more generic medications and trying to do away with industry practices that allow manufacturers, insurers and pharmacy benefit managers to profit at the consumer’s expense.

AbbVie fell 2.8 percent to $84.76 while Merck lost 2 percent to $73.37.

Citigroup and other banks stood out. Citi said its earnings rose in the last three months of 2018, helped by a lower tax rate and lower expenses. Its stock gained 4 percent to $58.93.

PG&E, the parent of Pacific Gas and Electric, said it will file for Chapter 11 bankruptcy protection and its stock plunged 52.4 percent to $8.38. It faces potentially colossal liabilities over deadly wildfires in 2017 and 2018 and announced the resignation of CEO Geisha Williams on Sunday. The company says deliveries of natural gas and electricity shouldn’t be affected.

PG&E’s market value has dropped by $20 billion since November, when reports indicated PG&E had a power outage around the time and place the deadly Camp Fire began. That blaze killed at least 86 people and destroyed 15,000 homes.

Investors now value the company at $4.3 billion. Media reports say PG&E’s liabilities could reach $30 billion.

British lawmakers are scheduled to vote Tuesday on Prime Minister Theresa May’s deal covering Britain’s planned departure from the European Union, and all indications are that the deal will be rejected. That could contribute to volatility for U.K. markets, particularly the pound. Britain is scheduled to leave the EU on March 29.

The FTSE 100 index fell 0.9 percent and the pound rose to $1.2865 from $1.2845.

Investors also reacted to deal talks. Newmont Mining will buy Canada’s Goldcorp for $10 billion, creating the world’s biggest gold miner as gold becomes more expensive to procure. Goldcorp rallied 7.1 percent to $10.38 while Newmont fell 8.9 percent to $31.78.

Gannett, the publisher of USA Today, rocketed 21.2 percent to $11.82 after Digital First Media said it offered to buy the company for $1.36 billion. Gannett said will review the proposal.

Bond prices turned lower. The yield on the 10-year Treasury note rose to 2.71 percent from 2.69 percent.

Benchmark U.S. crude oil gave up 2.1 percent to $50.51 per barrel in New York, while Brent crude, the international standard, fell 2.5 percent to $58.99 per barrel in London.

Natural gas jumped 15.9 percent to $3.59 per 1,000 cubic feet. Wholesale gasoline fell 2.6 percent to $1.36 a gallon and heating oil lost 1.4 percent to $1.85 a gallon.

The dollar fell to 108.20 yen from 108.50 yen. The euro remained at $1.1465.

Germany’s DAX slid 0.3 percent while the CAC 40 in France fell 0.4 percent.

Hong Kong’s Hang Seng index lost 1.4 percent and the Kospi in South Korea declined 0.5 percent.