US STOCKS-S&P 500, Dow take a breather on trade deal doubtsReuters | New York | Updated: 08-11-2019 23:53 IST | Created: 08-11-2019 23:52 IST
The S&P 500 and Dow Jones indexes stalled on Friday after a record run, as U.S. President Donald Trump contradicted reports that the United States and China would roll back existing tariffs. However, the tech-heavy Nasdaq gained on the back of a rise in shares of Microsoft Corp and Qualcomm Inc.
The benchmark S&P 500 and blue-chip Dow had closed at all-time highs on Thursday after officials said both U.S. and China 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 later recovered.
"Let's not forget that in the past we have come so close to a trade agreement and at the last minute there has been a pullback," said Michael Geraghty, capital market strategist at Cornerstone Capital Group in New York. "The president is very set in his way and the Chinese have their viewpoint too, so it seems it's going to take a bit longer for the trade deal to be nailed down."
Four of the 11 major S&P 500 sectors were trading lower, with the energy sector shedding 0.97%, making it the biggest decliner, as oil prices fell on Trump's comments before steadying. Still, the S&P 500 was on track for its fifth straight week of gains, while the Nasdaq was eyeing its sixth consecutive weekly rise, partly propelled by a rosy third-quarter earnings season.
Walt Disney Co gained 3.3% 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+. Of the 446 S&P 500 companies that have reported results so far, nearly three quarters have beaten profit estimates, according to IBES data from Refinitiv. The numbers, to some extent, reflect significantly lowered analysts' forecasts.
At 1:03 p.m. ET the Dow Jones Industrial Average was down 33.83 points, or 0.12%, at 27,640.97, the S&P 500 was up 0.79 points, or 0.03%, at 3,085.97 and the Nasdaq Composite was up 16.93 points, or 0.20%, at 8,451.44. Dragging on the Dow were losses in shares of industrials 3M Co and Boeing Co.
Among other stocks, Gap Inc fell 7% after it said Chief Executive Officer 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. Energy drinks maker Monster Beverage Corp rose 3.6% after posting a better-than-expected third-quarter profit and announcing a $500 million share buyback plan.
Advancing issues outnumbered decliners for a 1.00-to-1 ratio on the NYSE and a 1.01-to-1 ratio on the Nasdaq. The S&P index recorded 20 new 52-week highs and two new lows, while the Nasdaq recorded 56 new highs and 67 new lows.