U.S. stocks slipped Wednesday, after seeing record highs in recent days, as markets parsed a Reuters report that said an interim China-U.S. trade deal could be delayed until December, while also keeping an eye on corporate quarterly results and a potential merger of heavyweight technology companies.
How are major benchmarks performing?
The Dow Jones Industrial Average
DJIA, -0.09%
fell 43.44 points, points, or 0.51% , to touch 27,445, while the S&P 500 index
SPX, -0.07%
dipped by 5.31 points, or 0.17%, to 3,067. The Nasdaq Composite Index
COMP, -0.39%
was down 45.50 points, 0.16%, at 8,391.
On Tuesday, the Dow
DJIA, -0.09%
rose 30.52 points, or 0.1%, at 27,492.63, surpassing its previous record, set on Monday. The Nasdaq
COMP, -0.39%
edged 1.48 points higher to reach 8,434.68, a gain of less than 0.1%, also notching a second consecutive record close. The S&P 500 index
SPX, -0.07%,
meanwhile, edged 3.60 points lower, or 0.1% to end the day at 3,074.67.
The Dow’s year-to-date gain now stands at nearly 18% after rallying 3.3% in the past month. The S&P 500 is up more than 22% this year after surging 4% in the past month.
What’s driving the market?
Investors were digesting a report from Reuters that said a long-awaited interim trade deal between the U.S. and China could be delayed until December as discussions continue between the world’s two-largest trading partners about terms and a venue for a meeting.
“We’ve been rallying on the anticipation of a trade deal and the Reuters news report has caused a slight pullback,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group, in an interview.
“The market may take a breather from here,” Boockvar told MarketWatch, noting that the market sentiment has gotten extremely bullish on the back of last week’s Federal Reserve interest rate cut and on optimism about the prospects for a coming trade truce.
“If we don’t get a deal, that’s a different story.”
A preliminary, or “Phase One” trade deal between China and the U.S. is still a hope, but some strategists worry that the market may be placing too much emphasis on a deal coming to fruition soon.
“The market has taken an overly optimistic view on the Phase One deal, nudged on by better US economic data of late,” wrote Stephen Innes, market strategist at AxiTrader. “So, with delay comes chance that risk-on sentiment has too long to ferment, stalls and then maybe reverses as the waiting game weighs,” he said.
“Markets are back in consolidation mode on Wednesday, as traders take a breather in what is turning out to be a much more relaxed week than those just gone,” said Craig Erlam, an analyst with OANDA.
“It really has been an action-packed few weeks in the markets and last week was arguably the peak. A Fed rate cut, trade war headlines, US jobs data and the busiest week of earnings season, it’s no surprise we’re seeing a little fatigue this week,” Erlam added.
With the U.S. corporate earnings reporting season winding down, FactSet data indicates that 75% of S&P 500 companies to report thus far have topped analysts’ expectations.
New York Federal Reserve Bank President John Williams was scheduled to speak at 6:30 p.m. ET at a global risk forum in New York.
Which stocks are in focus?
Shares of Xerox Holdings Corp.
XRX, +3.38%
were higher after the Wall Street Journal said the company is considering a cash-and-stock offer for personal-computer and printer-maker HP Inc.
HPQ, +10.82%,
which has a market value of about $27 billion. HP jumped almost 10%.
Shares of Humana
HUM, +3.38%
rallied almost 3.5% in trading Wednesday, after the health care services company reported third-quarter profit and revenue that beat expectations, and provided an upbeat outlook. CVS Health
CVS, +5.04%
rose on stronger than expected earning also.
WW International Inc.,
WW, -15.54%
the company formerly known as Weight Watchers, raised its outlook for the year but the after-hours stock movement indicated that the hike left too much chance of a disappointment for Wall Street’s taste. The stock was down 16%.
Wendy’s Co.
WEN, -0.14%
shares rose after the fast-food chain reported third-quarter results that beat expectations and raised its full-year guidance.
Shares of NewYork Times Co.
NYT, -6.39%
slipped more than 5% after the media company said it sees continued turbulence in digital ads as it reported its quarterly results.
Japanese technology company SoftBank Group Corp.
9984, +0.65%
reported hefty losses as its earnings were hammered by office-space sharing startup WeWork. Japan-traded shares rose 0.65%.
Qualcomm
QCOM, -0.63%
and Fox Corp
FOX, +0.12%
, are among companies due to report after the market close Wednesday.
How are others assets trading?
The yield of the 10-year U.S. Treasury note
TMUBMUSD10Y, -2.57%
fell to 1.83% Wednesday, from 1.865% late Tuesday when it registered its biggest one-day rise in five weeks.
December gold
GCZ19, +0.62%
on Comex was up 0.2% after losing ground at a psychologically important level at $1,500 on Tuesday.
Oil slipped, with West Texas Intermediate crude for December delivery
CLZ19, -1.64%
down fractionally to trade at $56.22 a barrel, after settling 1.2% higher on Tuesday on the New York Mercantile Exchange. Supply rose sharply, a government agency said Wednesday.
The ICE U.S. dollar index
DXY, -0.03%,
a gauge of the greenback’s performance against six major rivals, fell 0.03% to 97.95, after gaining 0.4% a day ago.
In Asia overnight, the China CSI 300
000300, -0.45%
fell 0.45%, the Shanghai Composite
SHCOMP, -0.43%
declined 0.4%. Hong Kong’s Hang Seng Index
HSI, +0.02%
ended little-changed, while Japan’s NIKKEI 225 Index
NIK, +0.22%
edged up 0.2%. In Europe, the Stoxx Europe 600’s
SXXP, +0.21%
rose 0.2%.
Source : MTV
