By Mark DeCambre and Anora M. Gaudiano, MarketWatch
Apple is the biggest drag on the Dow industrials, cutting nearly
30 points
U.S. stock benchmarks on Thursday trimmed earlier losses but
were still in negative territory a day after posting a trio of
all-time highs and closing above the psychologically important
level of 23,000 for the Dow.
Political tensions in Europe, lackluster economic reports out of
China, and the anniversary of the markets' worst percentage drop in
history were cited as some of the reasons for the downdraft.
What are stock-index futures doing?
The Dow Jones Industrial Average , which was down more than 100
points in early trade, was off by 24 points, or 0.1%, to 23,132.
The S&P 500 index fell 2 points, or 0.1%, to 2,559, with five
of its 11 main sectors trading lower. Consumer staples and
technology stocks were hardest hit, down about 0.6%, but were
balanced by big gains in telecoms and utilities sectors, which were
up 0.9%.
The Nasdaq Composite Index slumped 31 points, or 0.5%, to
6,593.
See:Dow 23,000 marks fresh history for blue chips
(http://www.marketwatch.com/story/dow-23000-marks-fresh-history-for-blue-chips-2017-10-17)
And check out:Dow's historic close above 23,000 belies a flicker
of weakness
(http://www.marketwatch.com/story/dows-historic-close-above-23000-belies-a-flicker-of-weakness-2017-10-18)
(http://www.marketwatch.com/story/dow-23000-marks-fresh-history-for-blue-chips-2017-10-17)What's
driving markets?
Thursday also marks the anniversary of the 1987 stock-market
crash
(http://www.marketwatch.com/story/30-years-after-black-monday-could-stock-market-crash-again-2017-10-16),
and some investors have voiced concerns about how sharp stocks have
run up since the November 2016 election, shaking off U.S. political
and geopolitical and valuation concerns, among others.
Meanwhile, Catalonia's president, Carles Puigdemont, failed to
meet a demand to give up the region's push for independence. The
Madrid government responded by suggesting it will trigger the
process for imposing central control
(http://www.marketwatch.com/story/spain-to-trigger-direct-rule-of-catalonia-as-standoff-continues-2017-10-19)
when it holds a special cabinet meeting on Saturday. A suspension
of autonomy in Catalonia could potentially spur fresh protests and
instability for one of the eurozone's biggest members.
Global stock markets came under pressure following reports that
growth in China slowed in the third quarter
(http://www.marketwatch.com/story/china-gdp-growth-slows-in-third-quarter-2017-10-18).
Stocks in Hong Kong dropped 1.9%, led by losses for property,
banking and tech shares.
(https://www.wsj.com/articles/ebay-shares-fall-on-lowered-profit-outlook-1508361244)Read:Wall
Street pros recall 'sheer panic' of October 1987 stock market crash
(http://www.marketwatch.com/story/black-monday-was-baptism-by-fire-for-these-wall-street-pros-2017-10-16)
Many believe stocks will continue to rise on hopes that the
administration of U.S. President Donald Trump will get a tax deal
done. U.S. Treasury Secretary Steven Mnuchin warned in a recent
interview with Politico
(http://www.marketwatch.com/story/mnuchin-has-an-important-warning-for-stock-market-investors-2017-10-18)that
stocks could take a big hit if tax cuts aren't implemented
soon.
Which stocks are in focus?
Philip Morris International Inc.(PM) shares dropped 4.2% after
adjusted earnings and sales fell short of expectations.
Verizon Communications Inc.'s (VZ) shares rose 1.7% after
reporting third-quarter results that mostly beat analysts'
estimates and affirmed its 2017 outlook.
eBay Inc.(EBAY) shares fell 1.7% after the online marketplace
cut its annual profit outlook for the second straight quarter
(https://www.wsj.com/articles/ebay-shares-fall-on-lowered-profit-outlook-1508361244).
(http://www.marketwatch.com/story/china-gdp-growth-slows-in-third-quarter-2017-10-18)Apple
Inc.'s (AAPL) stock dropped 2.7%, putting it on track to suffer the
biggest decline in a month. Also weighing on Apple was a report in
The Wall Street Journal that the new Apple Watch's independent
cellular connection feature was abruptly cut off in China
(http://www.marketwatch.com/story/apple-watch-cellular-feature-cut-off-in-china-2017-10-19),
without explanation.
Shares of database-software company MongoDB Inc. soared 25% in
their debut trading, after pricing its initial public offering
(http://www.marketwatch.com/story/mongodb-shares-surge-35-in-their-trading-debut-after-pricing-ipo-above-price-range-2017-10-19)at
$24 a share late Wednesday.
See also:MongoDB IPO: 5 things to know about database-software
company
(http://www.marketwatch.com/story/mongodb-ipo-5-things-to-know-about-database-software-unicorn-2017-10-06)
Alcoa Inc.(AA) shares slid 1.3% after an earnings miss
(http://www.marketwatch.com/story/alcoa-misses-on-earnings-but-beats-on-revenue-2017-10-18).
United Continental Holdings Inc.(UAL) sank 11% even as the
airline reported an earnings beat
(http://www.marketwatch.com/story/united-continental-earnings-beat-despite-weather-related-cancellations-2017-10-18)
despite weather-related cancellations.
American Express Co.(AXP) shares were trading 0.6% lower. The
company topped Wall Street expectations
(http://www.marketwatch.com/story/american-express-shares-wobble-after-hours-following-earnings-beat-2017-10-18)
on earnings and raised its guidance, and said Stephen Squeri, the
current vice chairman, will become chief executive and chairman on
Feb. 1
(http://www.marketwatch.com/story/american-express-says-stephen-squeri-to-become-ceo-chairman-2017-10-18).
After the close, PayPal Holdings Inc.(PYPL) is scheduled to
report.
What are strategists saying?
"It is difficult to say whether today's modest pullback is in
deference to the 1987 crash or something else," said Jack Ablin,
chief investment officer at BMO Private Bank.
"While there is no question that markets are overvalued and we
could see some corrections, the path of least resistance for stocks
is still to go higher. I will start reducing risk when credit
spreads begin to widen and when we see sustained signs of rising
inflation," Ablin said.
"To me, it appears that the Catalan impasse has triggered a
global selloff across the equity markets, because the Asian session
was rather quiet. The selloff really picked up as European traders
stepped in," said Ipek Ozkardeskaya, senior market analyst at LCG,
in emailed comments.
What economic reports are due?:
First-time jobless claims fell to 222,000 in the week ended Oct.
14, marking the lowest level for claims from those seeking
employment benefits since March 1973
(http://www.marketwatch.com/story/initial-jobless-claims-fall-to-levels-not-seen-since-march-1973-2017-10-19),
highlighting continued strength in the labor market. Economists
polled by MarketWatch had forecast claims to come in at
244,000.
Meanwhile, the Philadelphia Fed manufacturing index, or the
Philly Fed index, surged four points to 27.9, representing a
5-month high
(http://www.marketwatch.com/story/philly-fed-manufacturing-index-lurches-to-a-5-month-high-in-october-2017-10-19).
Any reading over zero signals improving conditions. Economists had
forecast a reading of 20.2.
The index of leading U.S. economic indicators
(http://www.marketwatch.com/story/us-leading-economic-indicators-fall-for-first-time-in-a-year---and-hurricanes-are-to-blame-2017-10-19)fell
0.2% in September, marking the first drop in 12 months, partly due
to the effect of recent devastating storms.
What are other assets doing?
European stocks ended firmly lower,
(http://www.marketwatch.com/story/european-stocks-hit-by-cocktail-of-worries-over-catalonia-china-2017-10-19)
with Spain's IBEX 35 index losing 0.7% as the Spain-Catalonia
standoff
(http://www.marketwatch.com/story/standoff-in-spain-intensifies-as-government-gears-up-to-strip-autonomy-from-catalonia-2017-10-19)continued.
In Asia , the Shanghai Composite lost 0.3%.
Oil prices fell sharply
(http://www.marketwatch.com/story/wti-crude-brent-prices-hover-at-highest-levels-in-weeks-2017-10-19).
West Texas Intermediate crude dropped 71 cents, or 1.4%, to $51.53
a barrel.
Gold futures rose
(http://www.marketwatch.com/story/gold-perks-up-as-geopolitical-tensions-in-europe-resurface-2017-10-19)
0.5%, to $1,289.80 a troy ounce, while the ICE U.S. Dollar Index
edged lower
(http://www.marketwatch.com/story/euro-rises-ahead-of-spain-catalonia-showdown-2017-10-19).
The euro was trading higher against the dollar at $1.1851.
--Barbara Kollmeyer contributed to this article.
(END) Dow Jones Newswires
October 19, 2017 14:02 ET (18:02 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.