US open: Dow heads south again as Boeing continues to weigh
By Iain Gilbert
Date: Tuesday 12 Mar 2019
(Sharecast News) - Trading on Wall Street got off to a mixed start on Tuesday as investors digested the release of the latest monthly inflation figures, with the Dow set for a slightly lower open as Boeing losses continued to weigh on the benchmark.
At 1430 GMT, the Dow Jones Industrial Average was down 0.06% at 25,634.46, while the S&P 500 was trading 0.35% firmer at 2,793.04 and the Nasdaq was up 0.26% to 7,577.51.
The Dow opened 16 points lower as Boeing's woes continued to mount and Monday's disappointing January retail sales figures remained in focus.
However, news that Chinese Vice-Premier Liu He and his US counterparts had continued negotiations for a US-China trade agreement by phone on Tuesday morning, according to Chinese state-run news agency Xinhua, gave a slight boost to sentiment.
Liu reportedly spoke with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to debate the wording of an agreement as the two sides appear to be drawing negotiations towards the light at the end of the tunnel, according to the agency's report.
The two negotiating teams also established the next steps of "working arrangements", Xinhua added, without giving details.
Donald Trump has said that the signing of a final deal will require a face-to-face meeting with Chinese Premier Xi Xinping but no date has yet been set for such an encounter, according to White House spokeswoman Sarah Sanders.
On the corporate front, shares in Boeing were down in 4.87% in early trading following the heavy losses sustained on Monday, as investors reacted to news of the Ethiopian Airlines crash over the weekend that left all 157 passengers dead.
Elsewhere, Tesla shares slipped 2.58% after founder Elon Musk's lawyers accused the Securities and Exchange Commission late on Monday of "unprecedented over-reach" and said the regulator was infringing on his first amendment rights by seeking to hold him in contempt of court. Musk denied violating a previous settlement with the SEC in a 33-page court filing on Monday evening and his lawyers urged the court to not give in to the "unconstitutional power grab" from the regulator.
On the macro front, the cost of living in the States surprised to the downside last month, as prices for used cars and trucks fell back.
According to the Bureau of Labor Statistics, the rate of increase in headline consumer prices slipped from a year-on-year pace of 1.6% for January to 1.5% in February (consensus: 1.6%).
Prices also fell short of forecasts at the 'core' level, with a dip in the year-on-year rate of gains from 1.6% to 1.5% (consensus: 1.6%).
As of 1425 GMT, the yield on the benchmark 10-year US Treasury note was flat at 2.64% after having hit 2.67% earlier during the session.
Elsewhere, the latest data from the National Federation of Independent Business showed sentiment among small-sized firms improved by less than expected in February.
The NFIB index of activity and sentiment rose to 101.7 from 101.2 in January, coming in below consensus expectations for a reading of 102.5.
Ian Shepherdson, chief economist at Pantheon Macroeconomics, said: "We hoped for a bigger rebound on the back of the recovery in the stock market, but at least the index is no longer falling.
"Economic expectations, the component most sensitive to stocks, rose five points to 11 - it was at 33 in September - but this was mostly offset by a four-point dip in earnings expectations, which might reflect fears over accelerating wage costs. The key labour market numbers in the survey dipped a bit but remain very strong; note these data are not new; they were published last week, ahead of the payroll report, as usual."
Investors in the US also had their attention on the UK, with MPs set to vote on Prime Minister Theresa May's Brexit deal later in the day.
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