By Barbara Kollmeyer and Mark DeCambre, MarketWatch
Alcoa drops about 9% on disappointing results, Morgan Stanley
trades flat
U.S. stock benchmarks traded lower Thursday afternoon as
investors focused on threat for a partial government shutdown as
well as a fresh batch of quarterly earnings results.
What are the main benchmarks doing?
The Dow Jones Industrial Average was down 103 points, or about
0.4%, to 26,012. The blue-chip average briefly hit a fresh intraday
record near the open at 26,153.42 before retreating and has been
down by as much as 168 points at 25,947.32. Boeing Co. (BA), which
has been the biggest contributor to the Dow's recent rally, led
losses, accounting for nearly 70 points
(http://www.marketwatch.com/story/boeings-stock-drop-exacts-50-point-toll-on-dow-industrials-in-late-morning-trade-2018-01-18)
of the average's decline.
Meanwhile, the S&P 500 was down about 5 points, or 0.2%, at
2,797, led by declines in the energy, industrials and
consumer-staples sectors of at least 0.4%.
The Nasdaq Composite Index picked up 2 points, or less than
0.1%, to 7,300.
All three major indexes closed at all-time highs on Wednesday
(http://www.marketwatch.com/story/dow-futures-point-to-triple-digit-gain-and-fresh-push-toward-26000-2018-01-17),
driven by optimism over the economy and corporate results. Leading
the pack, the Dow rallied more than 330 points to close at
26,115.65, the first finish ever above 26,000. The S&P 500 rose
0.9% to 2,802.56. The Nasdaq Composite Index rose 1% to
7,298.28.
What's driving markets?
Lawmakers are working to carve out a deal to avoid a looming
shutdown for Saturday. The two main political parties looked to be
making little headway though, with immigration a major sticking
point. Republican leaders are scheduled to bring forward a
short-term spending bill to keep the government running through
mid-February, The Wall Street Journal reported
(https://www.wsj.com/articles/immigration-talks-continue-as-government-shutdown-looms-1516211283).
The move for equity gauges also come as the 10-year benchmark
yield climbs to a level not seen in months above 2.6%, which could
influence appetite for assets perceived as risky like stocks.
Higher government-bond yields can raise the appeal of those assets
when compared against stocks. Bond prices and yields move
inversely.
Read:Government shutdowns haven't always been so bad for Wall
Street stocks
(http://www.marketwatch.com/story/heres-how-the-stock-market-has-handled-past-government-shutdowns-2018-01-16)
Which stocks look like key movers?
Shares of aluminum producer Alcoa Corp.(AA) slumped 8.6% after
quarterly results missed Wall Street forecasts
(http://www.marketwatch.com/story/alcoa-shares-fall-5-after-quarterly-results-miss-street-view-2018-01-17).
Morgan Stanley (MS) slipped 0.1% even after earnings topped
estimates
(http://www.marketwatch.com/story/morgan-stanley-shares-climb-after-earnings-top-estimates-2018-01-18).
Wyndham Worldwide Corp. (WYN) said it would pay $1.95 billion in
cash
(http://www.marketwatch.com/story/wyndham-worldwide-to-pay-195-billion-for-la-quintas-hotel-business-2018-01-18)
to buy La Quinta Holdings Inc.'s (LQ) hotel franchise and
management business. La Quinta shares were up 3.6%.
Apple Inc.(AAPL) shares could remain in focus as investors
digest a series of plans announced Wednesday celebrated as promises
to hire thousands of workers and bring home billions of dollars in
cash, but which came under fresh scrutiny
(http://www.marketwatch.com/story/apple-didnt-say-it-was-hiring-20000-new-workers-nor-bringing-back-its-overseas-cash-2018-01-17).
Shares were up 0.2%.
Amazon.com Inc. (AMZN) was trading 0.4% higher as it said it had
identified 20 finalists
(http://www.marketwatch.com/story/amazon-narrows-list-for-hq2-to-20-metropolitan-areas-2018-01-18)for
its second headquarters.
IBM Corp.(IBM) and American Express Co.(AXP) are scheduled to
report after the bell.
What are strategists saying?
"I wouldn't be surprised if markets made a small retreat, or at
least took a breather given the threat of a shutdown this weekend.
Avoid a shutdown and much of the enthusiasm for equities will be
driven by corporate results which have, so far, been supportive of
this rally," said Lee Wild, head of equity strategy at Interactive
Investor, in emailed comments.
Lee added that the modest moves lower for the Dow are fairly
insignificant given the strength of Wednesday's rally.
"Historically, in an environment of slowly rising yields the
market has down very well," said Randy Frederick, vice president
for trading and derivatives at the Schwab Center for Financial
Research,
"Yields may be rising because as the market continues to perform
astoundingly there might be concerns that the [Federal Reserve] is
going to raise rates even more than expected, and there's even some
talk that that might be necessary," he said. The market is
expecting between three or four interest-rate hikes of a
quarter-percentage point in 2018, according to CME Group data
(http://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html/).
What economic data are coming?
Weekly jobless claims fell to a 45-year low, falling by 41,000
to 220,000. Meanwhile, construction on new houses fell 8.2% in
December to a 1.19 million annual rate, with economists polled by
MarketWatch forecasting housing starts to total 1.28 million.
Permits for future construction were basically flat at 1.30
million.
Still, permits, housing starts and the number of new homes
completed all hit the highest levels since 2007
(http://www.marketwatch.com/story/us-housing-starts-fizzle-at-end-of-2017-2018-01-18).
A gauge of Philadelphia-area manufacturing fell to five-month
low
(http://www.marketwatch.com/story/philadelphia-fed-manufacturing-index-drops-to-five-month-low-in-january-2018-01-18)
of 22.2 in January, the Philadelphia Fed said Thursday.
Check out:MarketWatch's Economic Calendar
(http://www.marketwatch.com/economy-politics/calendars/economic)
Cleveland Fed President Loretta Mester will speak on monetary
policy at 6:05 p.m. Eastern.
What are other assets doing?
European stocks ended modestly higher
(http://www.marketwatch.com/story/european-stocks-edge-up-as-chinese-data-cheers-traders-2018-01-18),
while Asian markets largely gained
(http://www.marketwatch.com/story/nikkei-breaks-24000-for-first-time-since-1991-as-asian-markets-build-on-gains-2018-01-17),
lifted by technology stocks. Gold futures
(http://www.marketwatch.com/story/gold-under-pressure-as-dollar-regains-some-traction-2018-01-18)
finished sharply lower as the U.S. Dollar Index traded little
changed
(http://www.marketwatch.com/story/gold-under-pressure-as-dollar-regains-some-traction-2018-01-18).
Oil futures were trading lower. Bitcoin moved above $11,000
(http://www.marketwatch.com/story/bitcoin-struggles-to-keep-grip-on-11000-as-it-tries-to-shake-off-selloff-2018-01-18),
a day after a particularly volatile session for
cryptocurrencies.
Read:Why bitcoin's ugly rout could get worse before it gets
better
(http://www.marketwatch.com/story/5-key-reasons-bitcoin-other-cryptocurrencies-have-lost-a-stunning-365-billion-in-10-days-2018-01-17)
(END) Dow Jones Newswires
January 18, 2018 13:41 ET (18:41 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.