U.S. Stocks Waver on Mixed Earnings -- Update
July 18 2019 - 2:50PM
Dow Jones News
By Lauren Almeida and Akane Otani
U.S. stocks wobbled Thursday, kept under pressure by a string of
mixed earnings reports and sliding energy shares.
The Dow Jones Industrial Average fell 78 points, or 0.3%, to
27140. The S&P 500 lost less than 0.1%, and the Nasdaq
Composite declined 0.2%.
With few major economic reports scheduled for release this week,
investors have turned their attention to corporate results, which
have shown U.S. companies on uneven footing.
Netflix shed 11%, heading for its biggest one-day percentage
decline since 2016, after the video-streaming giant said late
Wednesday that its number of subscribers in the U.S. declined for
the first time in nearly a decade. Equipment-rental company United
Rentals lost 6.8% after narrowing its full-year revenue
outlook.
Other stocks fared better, with eBay rising 0.4% after the
online marketplace raised its profit outlook and notched
better-than-expected quarterly results.
Meanwhile, energy shares fell, following oil prices lower.
Crude began the trading session slightly higher but declined
later in the day as investors focused on a jump in fuel stockpiles
that came out in a government report Wednesday. Data showed that
gasoline inventories rose by 3.6 million barrels, setting off
worries about weakening demand for the fuel.
"The counter-seasonal gasoline build is especially concerning,"
said analysts at Houston-based Tudor, Pickering, Holt & Co.,
which also noted that gasoline exports were muted versus last
year.
West Texas Intermediate, the U.S. benchmark for oil, fell 2.4%
to $55.44 a barrel. Oil prices were down even after Iran's
Revolutionary Guard said that the country's forces seized a foreign
tanker, a sign that continued geopolitical tensions in the Middle
East could disrupt the flow of crude.
Elsewhere, the Stoxx Europe 600 fell 0.2%, weighed down by
declines among shares of technology and oil-and-gas companies.
While the European economy is doing well, "it's more about
downside risk coming from trade wars combined with the everlasting
Brexit risk," said Jorge Garyao, global head of inflation strategy
at Société Générale. The trade tensions that are currently focused
on U.S.-China "could easily move into the eurozone," he said.
In Asia, the Shanghai Composite Index fell 1%, notching its
third straight session of declines.
Progress toward a trade deal has stalled while the Trump
administration determines how to address Beijing's demands that it
eases restrictions on Huawei Technologies, people familiar with the
talks told The Wall Street Journal. No face-to-face meetings have
taken place or been scheduled since President Trump and President
Xi Jinping of China met last month in Japan and agreed to resume
talks.
Republican senators also are planning on introducing a bill that
would restrict Huawei from buying and selling U.S. patents,
according to draft text reviewed by The Wall Street Journal.
"Markets don't seem to be taking the comments on trade tensions
very well," said Fritz Louw, a currency analyst for Mitsubishi UFJ
Financial Group. He added that investors are likely to see several
days of volatility as they await progress in talks between China
and the U.S.
Japan's Nikkei Stock Average fell 2%, posting its biggest
one-day decline since March, after data showed exports tumbled for
the seventh straight month in June because of a sharp drop in
shipments of chip-making tools and automobile parts to China.
U.S. Treasurys strengthened, with the yield on the benchmark
10-year U.S. note falling to 2.059% from 2.102% Wednesday.
Yields, which fall as bond prices rise, tend to retreat when
investors are feeling more pessimistic about the economic
outlook.
--Dan Molinski, Anna Isaac and Caitlin Ostroff contributed to
this article.
Write to Lauren Almeida at lauren.almeida@wsj.com and Akane
Otani at akane.otani@wsj.com
(END) Dow Jones Newswires
July 18, 2019 14:35 ET (18:35 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.