U.S. Stocks Waver on Earnings, China Data

Date : 10/18/2019 @ 4:57PM
Source : Dow Jones News
Stock : FTSE 100 Index (UKX)
Quote : 7328.54  -30.84 (-0.42%) @ 4:35PM

U.S. Stocks Waver on Earnings, China Data

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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)

Copyright (c) 2019 Dow Jones & Company, Inc.

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