Kamis, 14 November 2019

Stocks retreat from record closes for S&P 500 and Dow as U.S. - China trade talks stall - MarketWatch

Stocks slipped back Thursday from records reached this week as hopes that the U.S. and China would soon finalize a trade agreement began to fade.

Technology stocks fell as Cisco Systems Inc. slumped after earnings fell short of expectations, suggesting business is avoiding investment amid President Trump’s trade war.

How are major indexes trading?

The Dow Jones Industrial Average DJIA, -0.12% lost 31 points, or 0.1%, to trade at 27,752, while the S&P 500 index SPX, -0.02% fell 2 points, or 0.1%, at 3,092. The Nasdaq Composite index COMP, -0.10% declined 14 points, or 0.2%, to 8,467.

On Wednesday, the Dow rose 92.10 points, or 0.3%, to end at a record 27,783.59, while the S&P 500 squeezed out a gain of 2.2 points, or 0.1%, to finish at 3,094.04, to also mark a record finish. The Nasdaq Composite  missed out on a record of its own, falling 3.99 points, or less than 0.1%, to close at 8,482.10.

What’s driving the market?

The prospect of a U.S. - China trade deal remains the main factor sustaining a rally that has pushed U.S. stocks record highs in the past five weeks.

”Right now we’re treading water on trade,” Sam Stovall, chief investment strategist at CFRA told MarketWatch. “Most of the recent gains are related to optimism on trade because if we look at earnings, they’re down 1% year-over-year in the third quarter and expected to be down again in the fourth.”

The Chinese Commerce Ministry said the U.S. and China were holding “in-depth” discussion on the partial trade agreement, emphasizing that the cancellation of tariffs was important to concluding a deal. Meanwhile Trump administration officials on Thursday confirmed China has ended a ban on American chicken, paving the way for the U.S. to export more than $1 billion in poultry and poultry parts to the Asian country.

The Wall Street Journal reported on Wednesday reported that U.S.-China talks had hit a snag over farm purchases, with Beijing balking at committing to a hard number in the text of the agreement while President Donald Trump has claimed China agreed to buy $50 billion of products a year. News reports have also highlighted a dispute over tariffs, with Beijing said to be insisting that existing tariffs be rolled back while the White House has resisted.

Read: The stock market heads to record heights even as the Trump impeachment hearings enter new phase — here’s why

In economic news, U.S. initial claims for unemployment benefits rose 14,000 to 225,000 in the week ended Nov. 9, a nearly five-month high, and above the 215,000 expected by economists surveyed by MarketWatch, but the data may be a seasonal anomaly. Separately, the U.S. October producer-price index rose 0.4% from September, above expectations of 0.3% rise.The 12-month rate of wholesale inflation tapered off to a three-year low 1.1% from 1.4%.

Federal Reserve Chairman Jerome Powell on Thursday told the U.S. House Budget Committee that the weakness in the manufacturing sector has not spilled over into the broader economy. On Wednesday before the Joint Economic Committee, Powell reiterated that the Fed would need to see a material change in conditions to move policy.

Meanwhile, St Louis Fed president, James Bullard, said Thursday that the “key risk” facing the U.S. economy is a sharper-than-expected slowdown, despite the Fed’s recent interest rate cuts. The economy has already been slowing down this year after relatively rapid growth over 2017 and 2018, he noted.

Stocks to Watch

Walmart Inc. WMT, -0.86%  a Dow component topped third quarter profit expectations but the stock gave back early gains despite 41% growth in online sales.

Shares of fellow Dow component Cisco Systems Inc. CSCO, -7.94%  were off more than 7% after it offered a disappointing outlook when it announced quarterly results after the closing bell on Wednesday.

See: Cisco confirms fears of a ‘broad-based’ slowdown in tech spending

Activist investor Carl Icahn is pushing for the proposed merger of Xerox Holdings Corp. XRX, +3.13%  and HP Inc. HPQ, +2.82%. Icahn owns a 10.6% stake in Xerox and told The Wall Street Journal on Wednesday that he also owns a 4.24% stake in HP, valued at roughly $1.2 billion, that had not been previously reported. Xerox’s stock rose 2.4% , while HP shares advanced 2.2%.

Shares of Viacom Inc. VIAB, +2.56%  rose 2.2% early Thursday, after the media conglomerate reported fiscal fourth-quarter earnings and sales that beat Wall Street expectations.

How are other markets trading?

The yield on the 10-year U.S. Treasury note  TMUBMUSD10Y, -3.93%  fell 5.2 basis points to 1.819% on weaker economic data out of Asia, adding to a 3.9 basis-point slide Wednesday triggered by concerns over trade.

In commodities markets U.S. oil futures turned lower on Thursday after a government report revealed that domestic crude inventories rose a third straight week. West Texas Intermediate crude oil for December delivery CLZ19, -0.53%  fell 19 cents, or 0.3% to $56.93

Gold for December delivery on Comex GCZ19, +0.65%  rose $4.6 or 0.3% to $1,468 an ounce, finding support as government bond yields fell.

The U.S. dollar edged up to a four week high before slipping, measured by the ICE U.S. dollar index DXY, -0.23%.

In Asia overnight, stocks traded mostly lower, with Japan’s Nikkei NIK, -0.76%  retreating 0.8%, Hong Kong’s Hang Seng Index HSI, -0.93%  down 0.9% and the China CSI 300 000300, +0.15%  adding 0.2%. In Europe, stocks were trading mostly lower, with the Stoxx Europe 600 SXXP, -0.36%  down 0.3%.

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https://www.marketwatch.com/story/stock-futures-drift-lower-after-record-close-for-sp-500-dow-2019-11-14

2019-11-14 17:47:00Z
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