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U.S. Stocks Slip Amid Earnings, Trade Headlines: Markets Wrap

Vildana Hajric
U.S. Stocks Slip Amid Earnings, Trade Headlines: Markets Wrap

(Bloomberg) -- U.S. stocks ended a lackluster session lower as trade headlines and a spate of corporate earnings weighed on shares ahead of tomorrow’s expected rate cut by the Federal Reserve. Treasuries edged higher.

The S&P 500 negative in the final half hour after earlier hitting a fresh record. Health-care shares rose on strong results from Merck and Pfizer. A report that China and the U.S. might not sign a partial deal next month, a day after President Donald Trump’s assertion that negotiations were ahead of schedule, dented stocks exposed to the battle. Lenders got a lift after Treasury Secretary Steven Mnuchin said he’d be open to looser bank rules. Alphabet and Akami earnings dropped the Nasdaq indexes.

“The big thing is markets are really trying to figure out how they should feel about earnings -- earnings aren’t coming in as bad as we expected but that still doesn’t mean they’re good,” Shawn Cruz, manager of trader strategy at TD Ameritrade, said by phone. “Investors are trying to figure out where they should be moving right now in light of all the information that we’re getting.”

Elsewhere yields on Japanese 10-year bonds hit the highest since June and their Australian counterparts jumped almost nine basis points, yet the sell-off cooled during European hours, with yields on German and U.S. peers halting their recent surge. The pound reversed a drop after the U.K.’s main opposition party said it will back an early election.

Investors are struggling for fresh impetus to extend the record-breaking rally in U.S. stocks. Optimism on the China trade front from President Donald Trump is aiding the bull case, and an anticipated Fed rate cut on Wednesday may add further fuel. Still, recent economic data has come in mixed and while earnings are topping estimates on average, the bar was low.

Here are some key events coming up this week:

Earnings include: Airbus, Apple, Credit Suisse, Facebook and PetroChina on Wednesday; Mitsubishi Heavy on Thursday; Exxon Mobil and Macquarie Group on Friday.The Fed is expected to lower the main interest rate when policy makers decide on Wednesday.U.S. economic growth is forecast to have slowed to 1.6% in the third quarter. GDP data are due Wednesday. The Fed’s preferred inflation metric, the core PCE deflator, is due Thursday.The Bank of Japan sets policy on Thursday and Governor Haruhiko Kuroda will hold a news conference.Friday brings the monthly U.S. non-farm payrolls report.

These are some of the main moves in markets:

Stocks

The S&P 500 Index slipped 0.1% at 4 p.m. New York time.The Nasdaq 100 fell 0.8% and the Dow Jones Industrial Average was little changed.The Stoxx Europe 600 lost 0.2%.Japan’s Topix index climbed 0.9%.India’s Sensex Index surged 1.5%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The yen rose 0.1% to 108.83 per dollar.Britain’s pound was little changed at $1.2862.The euro added 0.1% to $1.1112.

Bonds

The yield on 10-year Treasuries declined two basis points to 1.83%.The two-year rate fell one basis points to 1.64%.Germany’s 10-year yield decreased two basis points to -0.35%.

Commodities

The Bloomberg Commodity Index advanced 0.2%.U.S. natural gas futures surged 6.2%.Gold futures fell 0.3% to $1,492.10 an ounce.West Texas Intermediate crude decreased 0.5% to $55.54 a barrel.

--With assistance from Andreea Papuc and Todd White.

To contact the reporter on this story: Vildana Hajric in New York at vhajric1@bloomberg.net

To contact the editor responsible for this story: Jeremy Herron at jherron8@bloomberg.net

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