US open: Stocks head south as investors mull over earnings

By Iain Gilbert

Date: Wednesday 17 Jul 2019

US open: Stocks head south as investors mull over earnings

(Sharecast News) - Stocks on Wall Street started lower on Wednesday, extending the previous day's declines after comments from Donald Trump put a halt to a historic rally.
As of 1525 BST, the Dow Jones Industrial Average was down 0.09% at 27,311.16, while the S&P 500 was trading 0.19% weaker at 2,998.30 and the Nasdaq Composite started out the session 0.07% softer at 8,217.05.

The Dow opened 24.47 points lower on Wednesday after closing lower during the previous session following the US President's remarks and on the back of poorly received second-quarter earnings reports from some of America's largest lenders, including JP Morgan and Goldman Sachs.

Major indices started out the week higher, recording another all-time high on Monday after Federal Reserve chairman Jerome Powell hinted during the week before at an interest rate cut at the end of July.

Powell hinted at a possible rate cut again on Tuesday, but the message was accompanied by a string of risk factors, including the federal debt limit and falling US inflation, which combined saw traders take some money off the table.

Trump also said on Tuesday that China and the US still had "a long way to go" before settling their trade dispute, brandishing again the threat of trade tariffs on an additional $325bn-worth of Chinese exports.

"We have a long way to go as far as tariffs where China is concerned, if we want. We have another $325bn we can put a tariff on, if we want," he said.

His comments came as the world's two largest economies were hoping to restart negotiations on a trade deal after Trump and Chinese President Xi Jinping agreed not to escalate tensions at last month's G-20 leaders' summit in Osaka, Japan .

With corporate earnings season well and truly underway, Bank of America posted better-than-expected earnings on Wednesday, driven by the strength of its retail banking operation, but its CFO did warn that lower rates would hit its net interest income growth.

Elsewhere, United Airlines reported earnings and revenue that came in ahead of analysts' expectations and increased the size of its share buyback program by $3.0bn, while Cintas shares advanced after topping expectations.

Ebay, IBM and Netflix were all scheduled to report earnings after the close of trading in New York.

In other corporate news, Amazon shares were down 0.33% in early trade after the EU announced it was launching an investigation into the e-commerce giant over possible anti-competitive business practices.

On the data front, US housing starts were little changed last month although the details of the report were mixed.

According to the Department of Commerce, housing starts declined at a 0.9% month-on-month clip to reach an annualised rate of 1.253m, putting them 6.2% below their year-earlier level.

Housing permits meanwhile, a key lead indicator for activity in the sector, shrank by 6.1% versus May to reach 1.299m, although economists had correctly anticipated that fall.

The annualised pace of housing starts for May was revised marginally lower, from 1.269m to 1.1265m.


Email this article to a friend

or share it with one of these popular networks:

Top of Page