By Chris Matthews and Mark DeCambre, MarketWatch
Bank of America beats earnings estimates on retail business
U.S. stocks posted modest losses at the start of trade
Wednesday, after markets retreated from record territory Tuesday
following comments from President Donald Trump on the lack of
progress between Beijing and Washington in the long-running dispute
over trade and import tariffs.
How are the major benchmarks performing?
The Dow Jones Industrial Average fell 34 points, or about 0.1%
at 27,302, the S&P 500 index ) fell 2 points, or less than
0.1%, at 3,003, while The Nasdaq Composite index slipped 2 points
to reach 8,223, a loss of less than 0.1%.
On Tuesday, the Dow closed 23.50 points lower to 27,335.6, a
loss of 0.1%, after briefly touching an intraday high at 27,398.68.
The S&P 500 dropped 0.3% to 3,004.04, shedding 10.3 points and
the Nasdaq Composite Index edged 0.4% lower, or a 35.4 point drop,
to 8,222.80.
What's driving the market?
Bank of America Corp. (BAC), the second-largest bank in the U.S.
by assets, produced better-than-expected earnings
(http://www.marketwatch.com/story/bank-of-americas-stock-falls-after-profit-beats-but-revenue-comes-up-a-bit-short-2019-07-17)
of 74 cents a share, or $7.35 billion, compared with expectations
for 71 cents a share based on analysts polled by FactSet. Revenue
for the quarter came in slightly below expectations, but the bank
raised its dividend by 20%
(http://www.marketwatch.com/story/bank-of-america-plans-to-boost-dividend-20-increase-pace-of-stock-buybacks-2019-07-17),while
announcing an authorization for $30 billion in stock buybacks,
helping boost the stock by 1.3% at the open.
On Tuesday, markets skidded slightly lower after President
Donald Trump said an agreement with China on trade tariffs had "a
long way to go," and said he could impose the full slate of tariffs
on Chinese imports, in a briefing with reporters. He also said his
administration would explore national-security concerns related to
unsubstantiated allegations about Google-parent Alphabet Inc.'s
(GOOGL)(GOOGL) relationship with Beijing.
"Investors are now concerned a trade deal between the US and
China is not going to happen anytime soon after President Trump
said he could go ahead with further tariffs hike against Beijing,"
wrote Pierre Veyret, technical analyst at ActivTrades.
Stocks pared some premarket gains after data on new building
permits came in weaker than expected, falling 6.1% in June to an
annual pace of 1.22 million homes, versus the 1.3 million expected
by economists, per a MarketWatch poll. Home builders broke ground
on new homes at a rate of 1.25 million last month, down 0.9% from
May, though above the forecasted 1.24 million homes.
Wall Street participants were also digesting comments from
Federal Reserve Chairman Jerome Powell on Tuesday, who implied that
the market has already priced in expectations for easing by the
central bank. Fed funds futures markets are placing 68% probability
of a 25-basis-point cut to rates, which currently stand between
2.25%-2.50%, and a 32% chance of a half-point cut to rates,
according to CME Group data
(https://www.cmegroup.com/trading/interest-rates/countdown-to-fomc.html).
Powell said the Fed was "carefully monitoring" risks to U.S.
economy wrought by tariff disputes.
Also in focus will be the Fed's anecdotal account of business
conditions in its regions, with the Beige Book set to be released
at 2 p.m.
Which stocks are in focus?
Shares of Abbot Laboratories(ABT) rose 1.5% after the
health-care product manufacturer reported second-quarter earnings
(http://www.marketwatch.com/story/abbott-stock-rises-after-earnings-beat-full-year-guidance-boost-2019-07-17)
that beat analyst forecasts, while raising its guidance for the
full year.
CSX Corp. (CSX) released disappointing second-quarter financial
results
(http://www.marketwatch.com/story/csx-stock-falls-after-earnings-miss-2019-07-16)
Tuesday evening, with both income and revenue below Wall Street
expectations. Shares fell 6.9%.
Qualcomm Inc. (QCOM) shares will be in focus Wednesday after the
Justice Department filed documents Tuesday
(http://www.marketwatch.com/story/justice-department-backs-qualcomms-bid-to-halt-enforcement-of-antitrust-ruling-2019-07-16)
that support the chip maker in its appeal against a federal ruling
in May that it had violated antitrust laws through licensing
practices that thwart competition. The antitrust action was
initiated by the Federal Trade Commission. Qualcomm stock rose
1.9%.
United Airlines Holdings Inc. (UAL) reported
better-than-expected second-quarter earnings
(http://www.marketwatch.com/story/united-airlines-parent-beats-q2-earnings-expectations-stock-rises-2019-07-16)
Tuesday after the close of trade. The stock was up 0.5%.
Shares of Nu Skin Enterprises Inc. (NUS) tumbled 16.5%, after
beauty-and-wellness products distributor issued a profit warning
Tuesday evening
(http://www.marketwatch.com/story/nu-skin-stock-falls-after-outlook-cut-on-china-sales-2019-07-16),
pegged to much reduced revenue from China.
After the bell, results from Netflix Inc. (NFLX) and eBay Inc.
(EBAY) are due.
How are other markets trading?
The yield on the 10-year Treasury note was at 2.09%, after
touching a four-week high of to 2.12% on Tuesday
(http://www.marketwatch.com/story/treasury-yields-edge-higher-ahead-of-retail-sales-2019-07-16).
In Asia, the China CSI 300 ended with a slight loss of less than
0.1%, Japan's Nikkei 225 declined 0.3% and Hong Kong's Hang Seng
Index gave up 0.1%. Meanwhile, European shares were trading flat
(http://www.marketwatch.com/story/european-markets-subdued-on-trade-war-concerns-but-inflation-data-buoys-stimulus-hopes-2019-07-17),
with the Stoxx Europe 600 down less that 0.1%.
In commodities markets, crude-oil gained
(http://www.marketwatch.com/story/oil-pops-higher-ahead-of-eia-inventory-report-2019-07-17)
1.2%, while gold prices fell 0.4%, adding to Wednesday's losses
(http://www.marketwatch.com/story/gold-loses-some-luster-two-day-skid-seen-2019-07-17).
The U.S. dollar was off 0.1% at 97.32, as measured by the ICE
U.S. Dollar Index.
(END) Dow Jones Newswires
July 17, 2019 09:55 ET (13:55 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.