Wall St Falls as Cost Pressures Rise, Oil Prices Retreat

While first-quarter corporate profits are expected to have notched their best growth in seven years, largely due to lower taxes, investors have focused on cost warnings from companies.

Construction Spending

Total construction spending at a seasonally adjusted annual rate.

“I think a lot of data is pointing to 2018 being a peak from many points of view,” said Mona Mahajan, U.S. investment strategist at Allianz Global Investors in New York.

“What’s concerning is beyond this year, the momentum will slow. We’re starting to see and what the market is starting to realize is a combination of perhaps the peak in momentum from earnings and economic perspective, combined with late-cycle rate-rising environment.”

At 12:43 p.m. ET, the Dow Jones Industrial Average was down 266.30 points, or 1.10 percent, at 23,896.85, the S&P 500 was down 14.11 points, or 0.53 percent, at 2,633.94 and the Nasdaq Composite was down 4.18 points, or 0.06 percent, at 7,062.08

Archer Daniels Midland, one of the largest exporters of U.S. sorghum to China, said it would take a $30 million hit to its trading profit in the second quarter due to the U.S.-China trade dispute.

Nine of the 11 major S&P sectors were lower, with a 1.3 percent drop in the industrial sector the biggest.

The energy sector fell 1.2 percent on the back of a more than 1 percent drop in crude oil prices as the dollar remained near a four-month high ahead of the Federal Reserve meet. [O/R]

Pfizer fell 4.3 percent, the most on the Dow, after posting its biggest miss on quarterly revenue in a year, on disappointing sales of some blockbuster drugs.

The technology sector was the lone gainer, up 0.3 percent as Apple jumped 1.5 percent ahead of its quarterly report after the bell.

Declining issues outnumbered advancers for a 2.16-to-1 ratio on the NYSE and for a 1.67-to-1 ratio on the Nasdaq.

The S&P index recorded one new 52-week high and 27 new lows, while the Nasdaq recorded 25 new highs and 66 new lows.

(Reporting by Sruthi Shankar and Savio D’Souza in Bengaluru; Editing by Shounak Dasgupta)

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Wall Street Falls on Investor Nerves About Interest Rates, Tech

Despite Friday’s decline the S&P eked out a gain of 0.5 percent for the week to show its second weekly gain in a row.

Equity investors were jittery as the 10-year Treasury yield reached its highest level since January 2014 as a bond selloff continued for a second day, driving the yield curve steeper after two weeks of flattening. [US/]

Benchmark 10-year notes last fell 12/32 in price to yield 2.9583 percent, from 2.914 percent Thursday.

The S. & P. 500 Index

Position of the S. & P. 500 index at 1-minute intervals on Friday.

When yields are high, investors favor bonds over equities including sectors such as consumer staples and real estate, which promise high dividends and slow, predictable growth. But high interest rates can boost bank profits so the financial sector managed to show a 0.05 percent gain, making it the best performer out of the S&P’s 11 industry sectors.

The consumer staples sector was the biggest percentage decliner with a 1.7 percent fall, led by PepsiCo.

“We’re seeing a follow through from yesterday’s action when the key was weakness in consumer staples. We came to this earnings season with very optimistic expectations and we’re seeing some very fundamental bottoms up issues at these companies,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Procter & Gamble fell 2.9 percent on top of a 4.2 percent drop the day before when it said shrinking retailer inventories and higher costs squeezed its margins.

Philip Morris International also had a second day of declines after getting crushed due to weak shipment volumes in its quarterly report.

Apple fell 4.1 percent, making it the biggest drag on the major indexes after Morgan Stanley estimated weak demand for its latest iPhones, a day after Taiwan Semiconductor raised fears of softer smartphone sales.

Alphabet, Facebook, Intel and Microsoft are among the major technology companies reporting next week.

S&P 500 companies are expected to report their strongest first-quarter profit gains in seven years. Of the 87 companies that have reported so far, 79.3 percent have topped profit expectations, according to Thomson Reuters I/B/E/S.

Declining issues outnumbered advancing ones on the NYSE by a 2.05-to-1 ratio; on Nasdaq, a 1.68-to-1 ratio favored decliners.

The S&P 500 posted 12 new 52-week highs and 22 new lows; the Nasdaq Composite recorded 54 new highs and 51 new lows.

On U.S. exchanges 6.45 billion shares changed hands compared to the 6.92 billion average for the last 20 trading days.

(Additional reporting by April Joyner in New York, Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta and Chizu Nomiyama)

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Tech Stocks, Netflix Power Wall Street's Gains

Hopes about a strong reporting season have helped divert attention from geopolitical and trade worries, which have roiled the markets in recent months.

“We’ve seen enough pessimism build up in investors as people are trying to look for the worst … things blowing up from a geopolitical perspective. Earnings so far have been good enough to help leave some of the pessimism that’s out there,” Delwiche said.

At 12:36 a.m. ET the Dow Jones Industrial Average was up 0.88 percent at 24,789.21. The S&P 500 rose 1 percent to 2,704.74 and the Nasdaq Composite gained 1.67 percent to 7,275.82.

Housing Construction

New private housing starts and permits authorized during the month, at a seasonally adjusted annual pace.

At their session highs, all three indexes were above their 50-day moving averages.

Data on Tuesday showed U.S. homebuilding increased more than expected in March amid a rebound in the construction of multi-family housing units. The PHLX housing index rose 1.12 percent.

Ten of 11 major S&P sectors were higher, led by the technology index’s 1.9 percent gain. The consumer discretionary index rose 1.64 percent, boosted by Netflix and Amazon, which gained 3.2 percent.

BofA Merrill Lynch’s April fund manager survey found the world’s biggest tech stocks were investors’ top pick for the third straight month despite mounting worries over regulation.

Facebook, Apple, Amazon, Netflix and Alphabet — collectively known as the FAANG group — rose between 1.4 percent and 9.7 percent.

Goldman Sachs reversed course to drop 1.7 percent, mirroring other big U.S. banks, shares of which declined despite beating Wall Street’s profit expectations.

J&J fell 1.43 percent after the healthcare conglomerate raised its sales forecast for the year but kept its outlook for full-year profit unchanged.

Advancing issues outnumbered decliners on the NYSE for a 2.74-to-1 ratio, and on the Nasdaq, for a 2.52-to-1 ratio.

(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)

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Wall Street Rises but Pares Gains Late After Report of FBI Raid

“Even if it ultimately ends up being nothing, the initial reaction is almost always negative in the market,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin, Texas.

Investors are looking forward to the start of earnings season to provide a sustained lift to U.S. stocks, with big banks, such as JPMorgan Chase, Citigroup and Wells Fargo, set to report first-quarter results on Friday.

Analysts expect quarterly profits for S&P 500 companies to rise 18.5 percent from a year ago, which would be the biggest gain in seven years, according to Thomson Reuters I/B/E/S.

The Dow Jones Industrial Average rose 46.34 points, or 0.19 percent, to 23,979.10, the S&P 500 gained 8.69 points, or 0.33 percent, to 2,613.16 and the Nasdaq Composite added 35.23 points, or 0.51 percent, to 6,950.34. AveXis Inc rose 81.6 percent after Swiss drugmaker Novartis offered to buy the gene therapy company for $8.7 billion.

3-Month Treasury Bills

High rate at weekly auction.

Merck shares rose 5.2 percent after the drugmaker’s blockbuster cancer drug, Keytruda, met the main study goal of helping previously untreated lung cancer patients live longer.

Shares of Leucadia National Corp jumped 11.6 percent after the company said it would sell most of its non-financial assets to focus on investment banking and advisory services.

Declining issues outnumbered advancing ones on the NYSE by a 1.10-to-1 ratio; on Nasdaq, a 1.13-to-1 ratio favored advancers.

Volume on U.S. exchanges was 6.28 billion shares, compared to the 7.3 billion average for the full session over the last 20 trading days.

(Additional reporting by Chuck Mikolajczak in New York and Sweta Singh and Diptendu Lahiri in Bengaluru; editing by Nick Zieminski and G Crosse)

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U.S. Stocks Jump in Upbeat End to Tumultuous Quarter

The Dow Jones Industrial Average rose 254.69 points, or 1.07 percent, to close at 24,103.11, the S&P 500 gained 35.87 points, or 1.38 percent, to 2,640.87 and the Nasdaq Composite added 114.22 points, or 1.64 percent, to 7,063.45.

The S. & P. 500 Index

Position of the S. & P. 500 index at 1-minute intervals on Thursday.

Investors were unfazed by economic reports showing a slight increase in consumer spending and initial jobless claims dropping to a more than 45-year low.

Jobless Claims

Weekly number of people who have filed for unemployment benefits for the first time.

In other data, core personal consumption expenditures (PCE) rose by 1.6 percent year-on-year. The index, the Federal Reserve’s preferred measure of inflation, has been below the U.S. central bank’s 2 percent target since mid-2012.

Amazon.com closed up 1.1 percent, recovering from a 4.6 percent drop after U.S. President Donald Trump criticized the online retailer via Twitter early Thursday, claiming without evidence that the company pays “little to no taxes to state & local governments.”

Stocks shot up earlier in the week as comments from officials in the United States and China suggested the world’s two largest economies would renegotiate tariffs and trade imbalances, averting a trade war.

But worries that retaliatory tariffs would harm the global economy led investors to cut equity exposure to a four-month low in March and reduce holdings of U.S. stocks to the lowest in nearly two years, according to a Reuters poll.

Advancing issues outnumbered declining ones on the NYSE by a 3.66-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favored advancers.

Volume on U.S. exchanges was 7.49 billion shares, compared to the 7.29 billion average over the last 20 trading days.

(Reporting by Stephen Culp in New York; Additional reporting by Charles Mikolajczak; Editing by James Dalgleish)

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Nasdaq Trims Losses as Facebook, Microsoft Gain

At 12:41 p.m. ET (1641 GMT) the Dow Jones Industrial Average was up 134.09 points, or 0.56 percent, helped by gains in financial shares.

The S&P 500 was up 9.84 points, or 0.37 percent and the Nasdaq Composite was down 4.18 points, or 0.06 percent, at 7,004.63.

Real Economic Growth

Annual rate of change in the gross domestic product, based on quarterly figures adjusted for inflation and seasonal fluctuations.

4th quarter revised

Change at annual rate

The main indexes are on track for their second straight month of losses, hurt by fears of a trade war between the United States and China as well as rising U.S. interest rates.

Comments from top officials of the two countries had given a sense that they would negotiate over President Donald Trump’s move to impose tariffs on Chinese goods.

However, China’s state-run Global Times reported on Wednesday that the country was expected to soon announce a list of retaliatory tariffs on U.S. exports.

Tesla dropped about 6 percent after the U.S. government said it would investigate a fatal crash and vehicle fire of a Model X in California.

Lululemon Athletica surged 11 percent after the Canadian athletic apparel maker posted a surprisingly strong fourth-quarter profit and forecast further growth in the first quarter.

Advancing issues outnumbered decliners on the NYSE by 1,647 to 1,178. On the Nasdaq, 1,421 issues fell and 1,413 advanced.

(Reporting by Sruthi Shankar and additional reporting by Yashaswini Swamynathan in Bengaluru; Editing by Anil D’Silva)

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Wall Street Wavers After Strong Rally, Tech Stocks Struggle

But the sentiment has improved after reports that the countries were willing to renegotiate tariffs and trade imbalances.

At 13:00 p.m. ET, the Dow Jones Industrial Average was up 0.67 percent at 24,365.61 and the S&P 500 rose 0.29 percent to 2,666.16.

The Nasdaq Composite fell 0.33 percent at 7,196.70.

5-Year Treasury Notes

High yields at auction.

Facebook dropped 2.3 percent as it continued to be weighed down by data privacy issues. The company faces an investigation by the U.S. Federal Trade Commission to explain how it allowed data of 50 million users get into the hands of a political consultancy.

“Tech and FANG are still trying to figure out what the way forward is, and the market is dealing with the aftermath of a massive rally. It’s hard to maintain that kind of momentum,” said Michael Antonelli, managing director, institutional sales trading at Robert W. Baird in Milwaukee.

Another weak spot in the tech space was Nvidia, which fell 2.8 percent after the company temporarily suspended self-driving tests across the globe.

Tesla shares dropped nearly 4 percent after the U.S. National Transportation Safety Board opened a field investigation of a fatal Tesla crash and major vehicle fire near Mountain View, California, last week.

Twitter fell more than 7 percent after short-seller Citron Research said it was short on the stock, adding that the company was “most vulnerable” to privacy regulations.

Advancing issues outnumbered decliners on the NYSE for a 1.38-to-1 ratio and for a 1.20-to-1 ratio on the Nasdaq.

(Reporting by Sruthi Shankar and Sweta Singh in Bengaluru; Editing by Anil D’Silva)

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