U.S. stocks fell slightly in early trading on Monday, in a modest pullback from the previous week’s solid gains, which had returned major indexes within striking distance of record levels.
Where are the major benchmarks trading?
The Dow Jones Industrial Average DJIA, -0.11% fell 18 points to 26,135 while the S&P 500 SPX, -0.21% was off 1 point to 2,904. Both fell less than 0.1%. Should the S&P reverse and end in positive territory, that would make for its sixth straight positive session, its longest such streak since February.
The Nasdaq Composite Index COMP, -0.75% fell 16 points, a decline of 0.2%, to 7,995.
At current levels, the S&P is about 0.5% below record levels, while both the Dow and the Nasdaq are within 2%.
The Dow last week logged a 0.9% weekly rise, its fourth positive week of the past five. The gains have taken it to its highest level since late January. The S&P 500 rose 1.2%, its ninth positive week of the past 11. The Nasdaq posted a gain of 1.4% for the week, its third positive week of the past four.
Recent trading on Wall Street has been muted, with tight trading ranges. The last time the S&P 500 ended with a move of 1%, in either direction, was late June.
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What factors are driving markets?
Trade tensions continue to be a primary driver for market action, and the issue has received renewed focus in recent sessions as the relationship between the U.S. and China shows signs of deteriorating.
On Friday, Bloomberg reported that Trump had instructed aides to proceed with $200 billion in tariffs against Chinese products. The report come on top of billions of dollars of tariffs that have already been levied, as well as a couple of days after the White House invited Chinese officials back to the table to try to hammer out a trade deal.
Over the weekend, however, China said it may decline the offer for renewed trade talks if Trump carries out the tariff threat. “China is not going to negotiate with a gun pointed to its head,” a senior Chinese official said, according to The Wall Street Journal.
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Investors have largely shrugged off the trade issue, focusing instead on strong corporate profits and economic data, there is still a concern that the issue could escalate and have a pronounced impact on global economic growth.
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Separately, investors continue to monitor the impact of former Hurricane Florence, which has weakened to tropical-depression status but is expected to cause major damage through rainfall and flooding.
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In the latest economic data, the New York Fed’s Empire State index fell 7 points to 19 in September.
What are market analysts saying?
“Should the protectionist policies be implemented, there might not be a major selloff in equities, seeing as a certain amount of the fear has already been priced in,” wrote David Madden, market analyst at CMC Markets U.K.
He noted that a recent report on consumer sentiment hit a multi-month high. “If the latter report is to be believed, we could see a pickup in consumer activity in the near-term. US average earnings are higher, and if consumer activity ticks up, that would be positive for the economy,” he wrote in a morning note.
What stocks are in focus?
Consumer-discretionary stocks were among the biggest decliners in early trading, with the sector down 0.6%. The technology group fell 0.5%. All five of the so-called FAANG stocks were lower, with discretionary giants Amazon.com Inc. AMZN, -2.55% down 1.7% and Netflix Inc. NFLX, -1.13% down 0.8%. Apple Inc. AAPL, -1.33% fell 1.5% while Facebook FB, -0.92% lost 0.8% and Google-parent Alphabet GOOG, -0.85% GOOGL, -0.90% slid 0.5%.
DowDuPont Inc. DWDP, +0.48% Chief Executive Edward Breen will assume the top executive position at the specialty-products company that will be created next year as part of the conglomerate’s yearslong plan to split into three entities. Shares rose 0.2%.
Oracle Corp. ORCL, +1.14% shares rose 0.7%. The enterprise-software giant is scheduled to report its quarterly results after the market closes.
Tyson Foods Inc. TSN, +0.00% stock fell 0.2% after the company said Chief Executive Tom Hayes will step down for personal reasons, after about two years in the role.
Mersana Therapeutics Inc. MRSN, -6.12% shares rose 5.7% after the U.S. Food and Drug Administration lifted a partial clinical hold on its phase I trial of its cancer treatment XMT-1522.
Shares of Cellectar Biosciences Inc. CLRB, +5.48% popped 10% after it won a rare pediatric designation for cancer treatment from the FDA.
Canopy Growth CGC, +1.76% shares rose 3.7%. The company said its Tweed Farms Inc. site has received license amendments that approve remaining greenhouse space, expanding the company’s licensed footprint to about 3.2 million square feet.
Meredith Corp. MDP, +0.63% will sell Time magazine for $190 million to Marc Benioff, the co-founder of Salesforce.com CRM, -0.34% Shares of Meredith rose 0.7%.
What are other markets doing?
Asian stocks fell sharply, pressured by the trade uncertainty and by a powerful typhoon. The region was extending its recent weakness. Shares in Shenzhen have slumped nearly 30% so far this year, while Hong Kong’s Hang Seng Index is down almost 20% from a recent peak. Major European indexes were slightly lower.
Crude-oil prices CLK9, +0.81% rose 0.8% on Monday, while gold GCM9, +0.30% was up less than 0.1%. The U.S. dollar index DXY, -0.49% fell 0.2% on renewed trade jitters.
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