U.S. stocks kicked Friday on a down note, putting major indexes on track for a third straight decline, amid lingering fears over U.S-China trade relations and sluggish global growth, coupled with a steady flow of earnings reports.
How are major indexes faring?
The Dow Jones Industrial Average DJIA, -0.71% fell 184 points, or 0.7%, to 25,040, while S&P 500 index SPX, -0.57% dropped 17 points, or 0.6%, to 2,689, and the Nasdaq Composite Index COMP, -0.55% declined 47 points, or 0.7%, to 7,241.
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On Thursday, the Dow slid 220.77 points, or 0.9%, to 25,169.53, while the S&P 500 retreated 25.56 points, or 0.9%, to 2,706.05. The Nasdaq Composite Index) COMP, -0.55% fell 86.93 points, or 1.2%, to 7,288.35.
For the week, the Dow is looking at a loss of 0.3%, threatening to snap a string of five straight weekly gains, the S&P 500 is on track for a 0.4% weekly skid, while Nasdaq Composite Index is poised for 0.3% decline.
What’s driving the market?
Trade-war jitters remain a burning issue for investors, with Asian markets picking up the selling baton after U.S. President Donald Trump confirmed reports that he had no plans to meet with Chinese President Xi Jinping before a March 1 trade-deal deadline. CNBC also, however, reported that the U.S. is likely to keep tariffs at 10% rather than raise them to 25% as scheduled.
Read: New White House message on China is that there’s a long way to go before striking trade deal
Adding to the tensions was a report that Trump will sign an executive order next week banning Chinese wireless equipment from U.S. networks ahead of the MWC Barcelona conference at the end of this month. Politico, citing sources familiar, reported that the move was aimed at protecting the U.S. from cyber threats.
Read: One last stock-market ‘meltup’? How the Fed’s ‘Powell put’ could set the stage
The hot-button trade topic resurfaced earlier Thursday after National Economic Council Director Larry Kudlow said during an interview with Fox Business Network that there is still a long way to go before the U.S. will strike a trade deal with China. Previous talks covered “a tremendous amount of ground” but enforcement will be the key, he said.
Nagging global growth worries also weighed on sentiment, with investors concerned that China’s slowdown has hit Europe, after weak data and forecasts from the single-currency region on Thursday
What data and Federal Reserve speakers are in focus?
It will be a muted day for data in the U.S., with wholesale inventories for December due at 10 a.m. Eastern Time.
St. Louis Fed President James Bullard said late Thursday that he thinks the central bank’s current interest-rate policy stance is slightly restrictive, when it should be more concerned about the slower growth and weaker inflation expected this year.
Read: How the European economy is raising fresh global growth fears
Deutsche Bank: Cocktail of macro risks could cause downturn that ‘rivals’ global financial crisis
What stocks are in focus?
Hasbro Inc. HAS, -3.88% shares declined by 3.6% after the toy maker missed fourth-quarter profit and revenue expectations. Meanwhile, rival toy maker Mattel Inc. MAT, +24.33% shares were up about 26% ahead of the bell after beating Wall Street revenue and earnings forecasts.
Shares of Arconic Inc. ARNC, -3.17% fell 1.9% after the maker of aluminum products for the aviation and auto industries beat earnings estimates for the fourth quarter and said it would reorganize its portfolio and spin off a business.
Shares of Skechers USA Inc. SKX, +17.87% jumped 18% as analysts cheered better-than-expected earnings released late Thursday.
Expedia Group Inc. EXPE, +4.07% shares were up 4.9% after delivering an upbeat forecast.
Shares of Coty Inc. COTY, +27.12% surged 27% after the cosmetics giant topped earnings forecasts.
What are analysts saying?
“Thursday’s weakness negated much of the last week’s gains, but gains that were starting to show evidence of fatigue. The percentage of issues above their 20-day moving average has been contracting for a little over a week, as high beta has been underperforming low beta, and 2-year yields have remained uninspiring,” said Jeff deGraaf, chairman of Reinaissance Macro Research, in a note.
“The new wrinkle has been the increased optimism as seen [through] option data, the small trader’s net-long positioning in the CFTC [data] and increase in the Investor’s Intelligence Bull/Bear ratio,” he said. “Each suggests a pause for equity performance, and given the proximity to resistance and internal divergences, we’re sympathetic to that notion.”
“Up to now the markets have been optimistic about a trade deal being reached, despite little solid evidence. Trump’s stance is now rattling investor nerves just weeks before the deadline,” said Jasper Lawler, head of research at London Capital Group, in a note to clients.
“With U.S. corporate earnings starting to dry up, traders’ full focus will soon be back on trade developments. With no deal in sight this will have a negative bias on equity market flows,” he added.
How are other markets trading?
In Asia, the Nikkei 225 NIK, -2.01% dropped 2% on trade tensions, while the South Korea Kospi SEU, -1.20% fell over 1%. Markets in Hong Kong and China remain closed for the Lunar New Year holiday.
In Europe, the Stoxx Europe 600 SXXP, -0.62% was setting up for a weaker session.
Crude oil CLH9, -0.21% was lower, along with gold GCH9, +0.36% while the U.S. dollar DXY, -0.01% was flat.
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