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US STOCKS-Wall Street treads water as trade-fuelled rally pauses


US STOCKS-Wall Street treads water as trade-fuelled rally pauses
Image Credit: Pixabay

Wall Street halted a record run on Friday as U.S. President Donald Trump contradicted reports that the United States and China would roll back existing tariffs. The S&P 500 and Dow Jones indexes had closed at all-time highs on Thursday after officials said both countries had agreed to roll back tariffs on each others' goods in a "phase one" trade deal if it is completed.

But Trump said on Friday he had not agreed to roll back the tariffs, although Beijing would like him to do so. The news sent all three major U.S. stock indexes sharply lower, but they quickly recovered to trade near flat. "Investors somewhere knew that there was an existing issue regarding the rollback of these tariffs and with record highs being set, a little consolidation is to be expected," said Michael Geraghty, capital market strategist at Cornerstone Capital Group in New York.

Seven of the 11 major S&P 500 sectors were trading lower, with the energy sector shedding 1.51% as oil prices fell. Trade-sensitive technology stocks dropped 0.11%. Still, the S&P 500 is on track for its best year since 2013, while the Nasdaq and blue-chip Dow are eyeing yearly gains after dropping in 2018, partly propelled by a rosy third-quarter earnings season.

Of the 430 S&P 500 companies that have reported results so far, nearly three quarters have beaten profit estimates, according to IBES data from Refinitiv. Those numbers, to some extent, reflect significantly lowered analysts' forecasts. Walt Disney Co gained 3.96% as its popular theme parks and a remake of "The Lion King" lifted earnings, and the company also spent less than it had projected on its online streaming service, Disney+.

At 10:32 a.m. ET the Dow Jones Industrial Average was down 52.84 points, or 0.19%, at 27,621.96 and the S&P 500 was down 2.47 points, or 0.08%, at 3,082.71. The Nasdaq Composite was up just 5.28 points, or 0.06%, at 8,439.80. Among other stocks, Gap Inc tumbled 8.14% after it said Chief Executive Art Peck would leave the company, a surprise exit in the middle of a restructuring. The apparel retailer also slashed its full-year earnings forecast.

Activision Blizzard Inc fell 1.36% after the video game publisher forecast fourth-quarter adjusted revenue below estimates, as it faces stiff competition from online and free-to-play games. Energy drinks maker Monster Beverage was up 3.53% after posting a better-than-expected third-quarter profit and announcing a $500 million share buyback plan.

Declining issues outnumbered advancers for a 1.14-to-1 ratio on the NYSE and for a 1.01-to-1 ratio on the Nasdaq. The S&P index recorded 14 new 52-week highs and two new lows, while the Nasdaq recorded 37 new highs and 59 new lows.

Also Read: US House approves procedure to impeach President Donald Trump

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)


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