Early gains fade as Wall Street assesses earnings
This is a file image of various stocks.
Damian J. Troise and Alex Veiga, The Associated Press
Published Tuesday, January 29, 2019 2:52AM EST
Last Updated Tuesday, January 29, 2019 11:35AM EST
NEW YORK -- Major U.S. stock indexes were mostly lower late Tuesday afternoon, placing the market on course for its second decline in a row. Losses in technology and media companies outweighed gains in industrial and health care stocks.
Early gains faded as investors assessed a mixed bag of corporate results and looked ahead to a heavy schedule of news on companies and the economy.
Xerox and 3M rose after reporting solid results, but Harley-Davidson fell. Apple reports its results after the close of trading.
Washington will continue trade talks with Beijing this week, and British lawmakers resume debate on the country's looming departure from the European Union in March. Currently there is no deal in place to insure smooth trade between Britain and the rest of Europe after Britain leaves the bloc.
In the U.S., the Federal Reserve ends its latest interest rate policy meeting on Wednesday and the government releases its monthly employment report, the most important indicator on the U.S. economy, on Friday.
The jobs report will have even more importance than usual because many other reports on the economy have been delayed because of the five-week partial shutdown of the federal government that ended Friday.
KEEPING SCORE: The Dow Jones Industrial Average gained 49 points, or 0.2 per cent, to 24,573 of 3:27 p.m. Eastern time. The benchmark S&P 500 index dropped 4 points, or 0.2 per cent, to 2,639. The Nasdaq composite fell 55 points, or 0.8 per cent, to 7,030. The Russell 2000 index of smaller companies was flat. Major stock indexes in Europe closed higher.
ANALYSIS: "We're still pretty much in a tight race today," said John Lynch, chief investment strategist for LPL Financial. "We think earnings are good and economic growth is good, it's just not great like it was last year."
FULL GLASS: Corning delivered an upbeat fourth-quarter report, topping forecasts. The company expects more growth for its display-glass and optical communications segments, which makes screens for electronic devices and fiber optic cables. The stock jumped 11.4 per cent.
PHARMA: Pfizer rose after the world's largest drugmaker reported mixed results. While hefty costs for layoffs and acquisitions sunk fourth-quarter profit, the results still topped Wall Street forecasts. The company has been struggling to upgrade sterile injectable drug factories it bought from Hospira, but repairs have dragged on and production shutdowns have cut into sales.
Pfizer also gave Wall Street a weak sales and profit outlook for the year, but the company is still coming off a good year, getting four new cancer drugs that could be blockbusters approved in the last 14 weeks of 2018. The stock climbed 3.1 per cent.
WINNERS: Nucor, the biggest U.S. steelmaker, said profit surged 68.5 per cent during the quarter thanks in large part to a growing economy. The company also saw increased steel shipments and prices. The stock gained 2.8 per cent.
Xerox surged on better-than-expected fourth-quarter results and an upbeat forecast as it restructures its operations. Xerox vaulted 11.6 per cent.
3M rose 2 per cent on upbeat fourth-quarter results and a positive forecast.
STUCK HOG: Harley-Davidson fell after the motorcycle maker reported a drop in sales worldwide, led by a weak showing in the U.S. Shipments worldwide fell 7.9 per cent. The company, which has been struggling to boost sales domestically, has been increasingly looking to sell more bikes overseas. It has warned that the ongoing trade dispute with China would raise costs. Harley's stock, ticker symbol "HOG," dropped 5.8 per cent.
GAME OVER: GameStop plunged after the company said it will no longer pursue a sale because of difficulty securing financing. The video game retailer is at its lowest value in nearly 14 years. The stock slid 27.3 per cent.
SOUR APPLE: Wall Street was expecting mixed results from Apple, which was slated to issue its latest quarterly results after the close of trading. The technology giant warned shareholders earlier this month that demand for iPhones is waning, mainly to slowing sales in China. Apple was down 1.3 per cent.
"It's clear that Apple's earnings are going to be bad, and it's China-related," said Mark Esposito, CEO of Esposito Securities. "People are concerned about that and it's causing the market to be down."
TRADE SPAT: American and Chinese negotiators will sit down for two days of trade talks starting Wednesday in Washington. Those talks could be more tense than usual. China has called on Washington to "stop the unreasonable crackdown" on telecom equipment maker Huawei, warning it would defend its companies. The statement comes after the U.S. escalated pressure on the tech giant by indicting it on charges of stealing technology and violating sanctions on Iran.
GETTING OUT: British lawmakers will debate and vote Tuesday on a "Plan B" for the country's impending exit from the European Union. They may also try to amend the plan. Analysts note it is likely that lawmakers will also push for a delay to the March 29 departure, giving them more time to find common ground. Britain is set to leave the bloc exactly two months from now, with or without a divorce deal.
ENERGY: U.S. crude oil rose 2.5 per cent to $53.31 per barrel in New York. Brent crude, used to price international oils, added 2.3 per cent to $61.32 per barrel in London.
Veiga reported from Los Angeles.