U.S. Stocks Waver on Earnings, China Data
October 18 2019 - 12:57PM
Dow Jones News
By Max Bernhard and Alexander Osipovich
U.S. stocks fell Friday, but major indexes were still poised to
close the week with gains after a strong kickoff to corporate
earnings season and an easing of trade tensions with China.
The S&P 500 dropped 0.5% but is still poised for a 0.5%
increase for the week, its second consecutive week of gains. Its
rise has been powered by upbeat quarterly earnings reports from
banks like JPMorgan Chase and Citigroup and hopes that the trade
dispute with China is on its way to being resolved.
The Dow Jones Industrial Average dropped 0.6% in midday trading
on Friday, while the Nasdaq Composite fell 1.2%. The Dow and the
S&P are within 2% of all-time highs reached this summer.
Of the 73 companies in the S&P 500 that have reported
earnings through Friday morning, more than four-fifths have beaten
analysts' expectations, according to Refinitiv. United Airlines
Holdings and insurance giant UnitedHealth Group are among the
stocks that rallied this week on better-than-expected results.
Among Friday's movers, Johnson & Johnson slumped 4.2%,
weighing on the Dow, after the company said it was recalling a
single lot of baby powder after tests found small amounts of
chrysotile asbestos.
Shares of Coca-Cola, another Dow member, jumped 2.6% after the
beverage giant posted higher sales.
The parade of positive corporate news helped ease some of
investors' jitters over the trade dispute with China. Following an
initial deal last week, President Trump has said he could sign a
"phase one" deal with his Chinese counterpart Xi Jinping in
November.
"Some of the headwinds around concerns of a slowing U.S. economy
and trade tensions have slowed a bit this week," said Philip
Blancato, CEO and president of Ladenburg Thalmann Asset
Management.
Overseas, Chinese stocks dropped sharply after data showed the
Chinese the economy slowed further in the third quarter. The
benchmark Shanghai Composite Index fell 1.3%, its biggest decline
in a month.
Fresh data showed that China's economy grew 6% in the quarter as
business activity continued to deteriorate in the world's No. 2
economy. Each quarterly slowdown in growth has pulled the economic
performance to new lows not seen since the current measure of
output was adopted in 1992.
"The figures are painting markets in red today," said Ipek
Ozkardeskaya, a senior analyst at London Capital Group. "Pulling
below 6% would be really bad for investor sentiment, not only in
China, but globally."
The benchmark Stoxx Europe 600 fell 0.2%. In the U.K., the FTSE
100 dropped 0.3% and the pound slipped 0.1% against the dollar.
Investors are watching developments closely before U.K.
lawmakers vote Saturday on a draft Brexit agreement struck with the
European Union. Prime Minister Boris Johnson is trying to muster
enough support for the deal in the U.K. Parliament.
The yield on U.S. 10-year Treasurys fell to 1.738% from 1.757%
on Thursday. Bond yields move in the opposite direction from
prices.
In commodities, U.S. crude futures gained 0.2% to $54.02 a
barrel. Gold futures slipped 0.2%.
Write to Max Bernhard at Max.Bernhard@dowjones.com and Alexander
Osipovich at alexander.osipovich@dowjones.com
(END) Dow Jones Newswires
October 18, 2019 12:42 ET (16:42 GMT)
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