By Chris Matthews and Mark DeCambre, MarketWatch
Bank of America beats earnings estimates on retail business
U.S. stocks traded lower 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 54 points, or 0.2% at
27,283, the S&P 500 index ) fell 9 points, 0.3%, at 2,995 ,
while The Nasdaq Composite index slipped 17 points to reach 8,306,
a loss of 0.2%.
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 0.3%
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.
Commerce Secretary Wilbur Ross echoed the president's cautionary
tone in an interview Wednesday
(http://video.foxbusiness.com/v/6060232695001) on Fox Business
Network saying that the administration's trade team engaged is
engaged in phone conversations with its Chinese counterparts, "and
the outcome of those phone conversations is what will help
determine whether there is the next meeting, and if so, when."
"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 also 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 4% 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 11.6%.
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
0.9%.
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 down 0.2%.
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 2.08%, 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 lower
(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 about 0.3%.
In commodities markets, crude-oil fell
(http://www.marketwatch.com/story/oil-pops-higher-ahead-of-eia-inventory-report-2019-07-17)
0.4%, while gold prices added 0.5%, after losing ground Wednesday
(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 97.25, as measured by the ICE
U.S. Dollar Index.
(END) Dow Jones Newswires
July 17, 2019 11:16 ET (15:16 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.