Market Snapshot: Stocks retreat as Wall Street weighs China-U.S. tariff rollback talk

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U.S. stocks edged lower at Friday’s open as enthusiasm wanes for risky assets with market participants assessing conflicting narratives on progress in Sino-American trade talks and reports of White-House infighting.

How are the major benchmarks performing?

The Dow Jones Industrial Average DJIA, -0.22%   fell 12 points, or 0.4% to 27,662, those the S&P 500 index SPX, -0.19% fell 5 points or 0.2% to 3,081, while the Nasdaq Composite index COMP, -0.19% retreated 17 points, or 0.2%, at 8,419.

On Thursday, the Dow rose 182.24 points, or 0.66%, to a record 27,674.80, while the S&P 500 index gained 8.4 points, or 0.27%, to an all-time high of 3,085.18. The Nasdaq Composite Index added 23.89 points, or 0.28%, to 8,434.52, its second-highest close in history, according to Dow Jones Market Data.

For the week, the Dow was likely to gain 1.2%. while the S&P 500 and Nasdaq may finish the five-session period 0.4% higher.

What’s driving the market?

Doubts about the U.S. agreeing to roll back some import duties in stages as a part of its partial pact with China are dulling the enthusiasm for equities that has taken all three stock indexes to fresh highs this week and driven Treasury yields to their highest levels since the 2016 election, won by President Donald Trump.

Peter Navarro, a senior U.S. trade adviser, said late Thursday that there was no formal agreement in place and the final decision would lie with Trump, according to the Wall Street Journal.

On Thursday, the China’s Ministry of Commerce said that an agreement had been achieved to jointly eliminate some tariffs in stages as a part of the phase-one pact but optimism surrounding that news faded in afternoon trade amid reportsof “fierce internal opposition” within the White House.

“A note of caution needs to be exercised here, as we have been here before, only to find that both sides have stepped back due to concerns that they may be perceived as having given too much away,” said Michael Hewson, chief market analyst at CMC Markets UK in a Friday research report.

The reports came as trade data from China was better than expected, but reflected ongoing struggles for the world’s second-largest economy. Chinese trade data for October show imports fell a less-than-expected 6.4%, while exports, which had been expected to fall 3.9%, only slipped 0.9%.

“Nonetheless the numbers still paint a picture of an economy that is struggling to recover from an economic slowdown and the effects of the current trade impasse,” Hewson said.

Looking ahead, markets await a report on U.S. consumer sentiment due to be released by the University of Michigan at 10 a.m. Eastern Time and a wholesale trade report due at the same time.

A trio of speakers from the Federal Reserve also are on deck, including San Francisco Fed President Mary Daly, who is expected to deliver opening remarks at the climate change conference in her home region at 11:45 a.m. Eastern Time, while Fed Gov. Lael Brainard will deliver closing comments at 8:35 p.m. New York Fed President John Williams will participate in a round table talk in Manhattan at 8:30 p.m.

Which stocks are in focus?

Shares of Dow component Walt Disney Co. DIS, +4.13%  were in focus after the media and entertainment giant late Thursday said it earned $1.05 billion, or $1.07 a share, compared with $2.32 billion, or $1.55 a share, in the year-ago period, while revenue rose 34% to $19.1 billion, from $14.3 billion a year ago. Shares rose 4.0% Friday, adding roughly 40 points to the Dow Jones Industrial Average.

Gap Inc. GPS, -6.64% shares fell 3.4% after the retailer said its CEO Art Peck will step down and guided that fiscal year-end earnings will come in weaker than expected.

Shares of Chesapeake Energy Corp. CHK, +2.21% were being watched after the oil and natural gas company’s top executives bought a total of 125,000 shares on the dip below $1 a share.

Duke Energy Crop. DUK, -2.27%  shares moved 3.3% lower after the utility reported third-quarter earnings that beat expectations, but revenue that fell shy.

Zillow Group Inc. Z, +11.87%  reported Thursday evening sales that more than doubled in the third quarter from last year and a better-than-expected loss. Shares were up more than 9% Friday.

Shares of Take-Two Interactive Software Inc. TTWO, +3.78%  edged 0.9% higher Friday after the videogame publisher missed analysts forecasts for profits and revenue in the third quarter.

How are others assets trading?

The yield of the 10-year U.S. Treasury note TMUBMUSD10Y, -0.44% rose 1.5 basis points to 1.942% after reaching a three-month high on Thursday.

December gold GCZ19, -0.40%  on Comex on Friday added to its recent slide to three-month low, off 0.3% at $1,461.80 an ounce.

West Texas Intermediate crude for December delivery CLZ19, -1.70%  fell 1.7% to $56.18 a barrel on the New York Mercantile Exchange, as trade news darkened.

The ICE U.S. dollar index DXY, +0.20%, a gauge of the greenback’s performance against six major rivals, was up 0.2%.

In Asia overnight, the China CSI 300 000300, -0.47%  fell 0.4%, and the Shanghai Composite SHCOMP, -0.49%  declined 0.5%. Hong Kong’s Hang Seng Index HSI, -0.70%  fell 0.7%, while Japan’s Nikkei 225 Index NIK, +0.26% added 0.3%.

In Europe, the Stoxx Europe 600’s SXXP, -0.24% traded 0.3% lower.

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