US open: Stocks head south as earnings and trade concerns continue
By Iain Gilbert
Date: Thursday 18 Jul 2019
(Sharecast News) - US stocks opened slightly lower for a third straight session as earnings and trade fears continued to weigh on market sentiment.
As of 1530 BST, the Dow Jones was trading 0.11% lower at 27,190.31, while the S&P 500 was down 0.02% at 2,983.80 and the Nasdaq Composite was 0.07% weaker at 8,179.39.
The Dow opened 29.54 points softer, a day after closing 115.78 lower, extending the week's declines after comments from Donald Trump two days before put a halt to a historic rally.
Trump triggered concerns about the state of negotiations with China earlier in the week when he said the pair 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.
The Wall Street Journal reported that the cause of the stalemate in negotiations was the US's restrictions on Chinese telco equipment giant Huawei.
However, Treasury Secretary Steven Mnuchin later told CNBC that Huawei was not a sticking point in negotiations, noting that a call between trade officials had been scheduled for later in the day.
With earnings season in full swing, AxiTrader's James Hughes said: "Earnings season may have looked a little brighter at the start of the week, but sentiment soured yesterday after a run of disappointing news."
But on a brighter note, Hughes added that although the Dow may have "given back a couple of hundred points this week", given the "generally effervescent" state of the market, the analyst felt this was "unlikely to prove much cause for concern yet".
Still on the corporate front, Netflix shares dropped in early trades after the streaming giant revealed overnight that its US subscriber numbers had dropped for the first time, while those of Morgan Stanley rose roughly 0.7% after posting better-than-expected quarterly results, driven by its wealth management and fund units.
M&T Bank was down 2.94% on the back of its own quarterly results, while Union Pacific steamed ahead 4.77% and SunTrust set off 1.67% firmer following their own figures.
In terms of data, a key index for manufacturing sector conditions in the US mid-Atlantic region snapped back in July amid a surge of new orders and with hiring ramping up quickly.
The Federal Reserve Bank of Philadelphia's closely-followed factory sector index jumped from a reading of 0.3 points for June to 21.8 in July. Economists had only been expecting a timid rise to 5.0.
Elsewhere, first-time unemployment claims in the States rose a tad more than expected during the previous week but continued to point to still solid labour market conditions.
According to the Department of Labor, so-called initial jobless claims increased by 8,000 over the week ending on 13 July to reach 216,000. Economists had forecast a reading of 215,000.
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