By Chris Matthews and Mark DeCambre, MarketWatch
UnitedHealth's stock weighs on the Dow
U.S. stocks edged lower Thursday morning, moving further away from record territory as investors wade through earnings and developments on international trade.
How are the major benchmarks performing?
The Dow Jones Industrial Average fell 55 points, or 0.2%, at 27,167, the S&P 500 index roughly 1 point to 2,983, while the Nasdaq Composite index skidded 24 points, or 0.3%, at 8,161.
All three main benchmarks were seen declining for a third straight session, with the S&P 500 set for its longest slump since the four-session drop ended June 26, according to FactSet data.
What's driving the market?
Market participants were focused on reports of a lack of progress toward a U.S.-China trade deal. The Wall Street Journal reported that talks have stalled on the back of negotiations centered on intellectual property protections Huawei Technologies Co (https://www.wsj.com/articles/u-s-china-talks-stuck-in-rut-over-huawei-11563393280?mod=searchresults&page=1&pos=7).
U.S. Treasury Secretary Mnuchin, speaking on CNBC, on the sidelines of the G-7 finance ministers meeting in France said that trade talks with China are continuing apace. "Don't believe everything you read in the press," he said. Mnuchin said that he and top trade official Robert Lighthizer are set to engage in fresh talks with his counterparts in China soon.
"We want to get a good deal, we will only enter a deal if it's a good deal," he said. "We want to be able to compete fairly," the Treasury Secretary said, but he declined to discuss the specifics of talks.
Edward Moya, senior market analyst at Oanda said in a Thursday research note that "the majority of early corporate profit reports are coming in better than expected. However, he said "US stock-index futures are being weighed down on faltering trade talks between the US and China."
Investors are watching corporate earnings results to see whether companies are able to pass on costs related to import tariffs and higher wages to customers, after fully pricing in a quarter-point cut in interest rates by the Federal Reserve later this month.
Meanwhile, Netflix Inc.'s (NFLX) downbeat subscription results also weakened sentiment somewhat, after the streaming video giant said Wednesday evening that it lost 126,000 subscribers in the U.S. in the second quarter, the first such loss since 2011 (http://www.marketwatch.com/story/netflix-stock-drops-more-than-10-as-earnings-show-huge-drop-in-new-subscribers-2019-07-17). Shares were down 11.3% Thursday morning.
Meanwhile, shares of UnitedHealth Group Inc. were dragging on the Dow (http://www.marketwatch.com/story/unitedhealths-stock-slump-exacts-nearly-30-point-toll-on-dow-industrials----but-ibms-rally-caps-loss-2019-07-18), down 2.1%, despite reporting better-than-expected quarterly profits, while raising its revenue outlook for the year. Shares in the health care giant have risen 17.6% during the last three months.
In economic data, a survey of manufacturers in Pennsylvania , New Jersey and Delaware came in much stronger than expected (http://www.marketwatch.com/story/philadelphia-fed-manufacturing-gauge-rebounds-strongly-in-july-to-highest-level-in-a-year-2019-07-18) at 21.8 in July, versus 0.3 in June and above expectations of 4.5, according to a MarketWatch poll of economists. New applications for jobless benefits rose (http://www.marketwatch.com/story/jobless-claims-rise-8000-to-216000-in-mid-july-but-theres-no-sign-layoffs-are-rising-2019-07-18) 8,000 to 216,000 in the week ended July 13, but remain at historic lows.
Which stocks are in focus?
Morgan Stanley(MS) shares rose 0.4%, after the bank reported second-quarter revenue and sales in the second quarter that fell less than analysts had expected but its results showed the steepest slide in trading revenue among major Wall Street banks.
Shares of Alcoa Corp. (AA) added 1.2%, reversing premarket losses after the aluminum producer reported a smaller-than-expected second-quarter loss (http://www.marketwatch.com/story/alcoa-posts-narrower-than-expected-q2-loss-2019-07-17) after Wednesday's close, (http://www.marketwatch.com/story/alcoa-posts-narrower-than-expected-q2-loss-2019-07-17) while lowering its guidance for aluminum demand growth in 2019 due to trade tensions and macroeconomic headwinds.
Honeywell International Inc. (HON) rose 2.4%, after the industrial conglomerate reported second-quarter profit (http://www.marketwatch.com/story/honeywells-stock-rises-after-earnings-beat-and-upbeat-guidance-while-sales-fell-shy-2019-07-18) that modestly beat expectations, but revenue that fell shy.
International Business Machines Corp. (IBM) reported second-quarter earnings (http://www.marketwatch.com/story/ibm-stock-rises-as-earnings-cloud-revenue-beat-street-view-2019-07-17) Wednesday evening that beat analyst estimates, boosted by growth in its cloud business, though revenue declined for the fourth-straight quarter. Shares rose 4% Thursday morning.
How are other markets trading?
The yield on the 10-year U.S. Treasury edged down less than a basis point to 2.06%.
In Asia, stocks closed lower, with the China CSI 300 shedding 1%, Japan's Nikkei 225 tumbling 2% and Hong Kong's Hang Seng index retreating 0.5%. In Europe, stocks were edging lower, with the Stoxx Europe 600 down 0.1%.
In commodities markets, the price of oil fell 2.4% to $55.39 per barrel, while gold edged higher to $1,424 per ounce. The U.S. dollar , meanwhile, was flat against a basket of its peers.
(END) Dow Jones Newswires
July 18, 2019 11:32 ET (15:32 GMT)
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