By Sue Chang and Mark DeCambre, MarketWatch
Dow industrials reclaim key 25,000-mark
U.S. stocks remained lower Wednesday, pressured by worries
surrounding Turkey's currency crisis and continued trade tensions,
while a sharp fall in oil prices sent the energy sector
skidding.
What are the main benchmarks doing?
The Dow Jones Industrial Average fell 220 points, or 0.9%, to
25,081, reclaiming the key 25,000 mark. The S&P 500 index
dropped 25 points, or 0.9%, to 2,814. The Nasdaq Composite Index
declined 105 points, or 1.3%, to 7,766.
In Tuesday's session, major indexes closed solidly higher
(http://www.marketwatch.com/story/us-stocks-look-set-to-pop-higher-as-global-markets-try-to-shake-off-turkish-tantrum-2018-08-14)
as selling of Turkey's currency abated, allowing investors to focus
on a healthy domestic economy and strong corporate results.
Read:The stock market is about to make history
(http://www.marketwatch.com/story/the-stock-market-is-about-to-make-history-2018-08-14)
What's driving markets?
Qatar, a country bordering Saudi Arabia, reportedly pledged to
invest $15 billion
(http://www.marketwatch.com/story/lira-spikes-as-qatar-pledges-to-invest-15-billion-in-turkey-2018-08-15)
in Turkey following a meeting between Turkish President Recep
Tayyip Erodgan and Qatar's Sheikh Temim bin Hamed Al Sani, Turkish
news reports said. The news helped the lira extend gains against
the U.S. dollar, with the Turkish currency up more than 5%. The
U.S. dollar index traded mostly flat
(http://www.marketwatch.com/story/turkish-lira-rebounds-for-a-second-session-in-a-row-but-dollar-index-extends-its-own-rally-2018-08-15)
in recent action.
But many investors are still worried that Turkey's crisis could
spread and have a negative impact on economies with exposure to the
country. While the Turkish economy is relatively small and few U.S.
companies have significant direct exposure to it, the situation is
seen as adding to the uncertain geopolitical environment, one
highlighted by worsening trade relations between the U.S. and its
major partners
(http://www.marketwatch.com/story/turkey-increasingly-aligns-with-russia-as-us-sanctions-sour-relations-with-west-2018-08-15).
Turkey raised tariffs on a number of American products, in the
latest escalation in tensions between the two countries. President
Donald Trump raised duties on Turkish aluminum and steel last week;
the latest tariffs from Turkey are in response to those "conscious
attacks," according to a translation of a tweet posted by Fuat
Oktay, the country's vice president.
Meanwhile, oil futures slumped after data showed U.S. crude
inventories posted a large and unexpected rise
(http://www.marketwatch.com/story/oil-falls-on-expectations-for-rise-in-crude-inventories-2018-08-15)
last week. The S&P 500 energy sector fell 3.5%.
See:Why Turkey's crisis doesn't spell doom for all
emerging-market currencies
(http://www.marketwatch.com/story/why-turkeys-crisis-doesnt-spell-doom-for-all-emerging-market-currencies-2018-08-14)
What data are in focus?
In the latest economic data, retail sales rose 0.5%
(http://www.marketwatch.com/story/us-retail-sales-show-midsummer-muscle-2018-08-15)
in July, above expectations. Excluding auto sales, they were up
0.6%, which was also ahead of expectations.
Separately, second-quarter productivity rose 2.9%
(http://www.marketwatch.com/story/us-productivity-surges-in-spring-to-more-than-three-year-high-2018-08-15),
the highest rate in more than three years. Output in the
second-quarter was up 4.8%. The Empire State manufacturing index
rose 3 points to 25.6
(http://www.marketwatch.com/story/empire-state-index-climbs-3-points-to-256-in-august-2018-08-15-81033019)
in August, the New York Fed said Wednesday, topping expectations
for a reading of 20.
What are market experts saying?
"Really, everything today has been playing on the idea of the
trade tensions and Turkey. Obviously crude is down today because
U.S. stockpiles rose over the last week to their highest level
since March 2017," said Kevin Nicholson, chief market strategist at
RiverFront Investment Group.
Nicholson also blamed some of the market's weakness to the
weakness in Tencent Holdings Ltd., often referred to as China's
Google, which is weighing on tech shares.
"You had early reaction to Tencent news and then multiply that
by the emerging markets being under pressure and the market are
down," he said.
"I'm not terribly surprised about the U.S. market sell-off. U.S.
growth stocks are feeling the pain," said Will Skeean, investment
advisor at Edge Capital Group Partner & Sr., referring to
shares of companies that grow at a faster pace than the market's
average.
"It's also very typical for the markets to look into the past
and try to fight the last war. Look at Turkey. Everybody out there
has been looking for the other shoe to drop. We're at the end of
summer, there's season[al] weakness. I'm not surprised we're seeing
a little downturn for the markets," he said.
"The Turkey issues are relatively new but for guys who have been
around for a while like me, it is bringing back haunting memories
of the 1997 Thai baht contagion," said Randy Frederick, vice
president of trading and derivatives at the Schwab Center for
Financial Research.
Read:'If there were ever a moment to harvest gains...it is now,'
warns Guggenheim's Minerd
(http://www.marketwatch.com/story/if-there-were-ever-a-moment-to-harvest-gainsit-is-august-2018-says-guggenheims-minerd-2018-08-15)
What stocks are in focus?
Macy's Inc. (M) slumped 14% after the department store reported
its revenue fell year-on-year even though its adjusted
second-quarter earnings beat expectations
(http://www.marketwatch.com/story/macys-shares-slide-after-sales-decline-2018-08-15).
It also raised its full-year outlook for both profits and
sales.
Tesla Inc. (TSLA) shares slid 3.1% after Bloomberg reported that
Chief Executive Elon Musk hadn't officially tapped Goldman Sachs
Group Inc
(http://www.marketwatch.com/story/goldman-silver-lake-not-officially-on-board-with-musks-plan-report-2018-08-14).
(GS) as its financial adviser when he revealed plans last week to
take the car maker private and said he had secured funding for the
deal.
Helios & Matheson Analytics Inc. (HMNY), the parent company
of MoviePass, sank 6% after it lost millions of dollars in the
second quarter
(http://www.marketwatch.com/story/moviepass-parent-company-reports-large-losses-stock-continues-plunge-2018-08-14)
as the subscription-movie offering sought to change its rules. The
stock had plummeted 100% over the past three months.
Columbia Sportswear Co.(COLM) rose 1.1% after Cowen upgraded the
stock to outperform and raised its price target by $13 to $103.
U.S.-listed shares of Tencent (0700.HK)(0700.HK) skidded 6.8%
after the Chinese company reported second-quarter earnings and
revenue that missed expectations
(http://www.marketwatch.com/story/tencent-profit-falls-below-expectations-2018-08-15).
GoDaddy Inc. (GDDY) fell 1.8% after the domain names management
company priced a public offering
(http://www.marketwatch.com/story/godaddys-stock-falls-after-public-offering-of-104-million-shares-2018-08-15)
of 10.4 million shares at $75.75 a share, below its Tuesday closing
price.
Canada-listed Canopy Growth Corp. shares (WEED.T) jumped 31%
after liquor seller Constellation Brands Inc. (STZ) said it would
invest about $4 billion into the cannabis company
(http://www.marketwatch.com/story/constellation-brands-makes-additional-4-billion-investment-in-cannabis-company-canopy-growth-2018-08-15).
What are other markets doing?
European stocks were weaker across the board
(http://www.marketwatch.com/story/european-stocks-inch-higher-as-turkish-lira-extends-rebound-2018-08-15)
while Asian markets were mixed with China, Korea, and Japan down
(http://www.marketwatch.com/story/asian-markets-retreat-weighed-by-sinking-tech-stocks-2018-08-14)
but Malaysia, Indonesia and Australia higher.
Gold slumped
(http://www.marketwatch.com/story/gold-strikes-roughly-18-month-low-as-dollar-strength-persists-2018-08-15)
more than 1%.
--Ryan Vlastelica contributed to this report
(END) Dow Jones Newswires
August 15, 2018 15:59 ET (19:59 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.