U.S. stocks headed lower Tuesday afternoon, as trading in assets perceived as havens, underscored fading optimism from a pause in China-U.S. trade hostilities.
How are benchmarks faring?
The Dow Jones Industrial Average DJIA, +0.01% was off 44 points, or less than 0.2%, at 26,678, the S&P 500 SPX, +0.01% slipped 0.1%, or 4 points, to 2,960, while the Nasdaq Composite Index COMP, -0.14% gave up 19 points, or 0.2%, to reach 8,073.
On Monday, the Dow closed up 117 points, or 0.44%, to 26,717.43, briefly trading above its closing record at 26,828.39 during that session, while the S&P 500 index held on to a 0.8% gain, or 23 points, at 2,964.33, setting an intraday record at 2,977.86. The Nasdaq Composite was 85 points higher, or 1.1%, at 8,091.16. The Dow and the Nasdaq are within 1% of their records.
What’s driving the market?
Investors appear doubtful of the state of the U.S. and global economies.
Wall Street was also digesting the latest on import tariff disputes after President Donald Trump told reporters late Monday that a new round of Sino-American negotiations had begun via phone on the heels of a face-to-face meeting between Trump and China President Xi Jinping on the sidelines of the Group of 20 gathering of major developed countries over the weekend.
White House economic adviser Peter Navarro told CNBC Tuesday that while negotiations have begun, “this will take time, and we want to get it right,” while providing no new details of the timing for further trade discussions will commence and when a deal might be reached.
Meanwhile Trump’s administration expanded a list of potential import duties, about $4 billion in goods, that could be placed on European Union products as a separate tariff spat between the U.S. and the EU persists centered on subsidies between Boeing Co. BA, -0.24% and Airbus SE AIR, -0.27%
The additions to list of duties include cheese and whiskey and extends an earlier roster of some $21 billion in EU products.
“A sense of optimism over both sides finding a middle ground on trade is likely to distract market players away from geopolitical risk factors. However, given how the implemented tariffs are denting global growth and still remain unresolved—nothing much has changed,” wrote Lukman Otunuga, research analyst a brokerage FXTM.
Against that backdrop, gold prices US:GCM9 surged 1.4%, after booking the biggest daily loss in a year, while the 10-year Treasury note yielded 1.97%, flirting with a nadir not reached since 2016. Bond prices rise as yields fall.
“With the underlying factors weighing on investor confidence still in play, this illusion of market stability may be tested as the second half of 2019 gets under way,” he said.
In a speech in London, Cleveland Fed President Loretta Mester said in a speech Tuesday that while she now sees “some chance” that the economy will stumble this year, she would need to see more hard evidence of a significant slowdown to advocated for interest rate cuts.
Meanwhile, the Organization of the Petroleum Exporting Countries have agreed to maintain price-supportive production cuts for nine months at the conclusion of a closely watched meeting of the cartel and major oil producers, including Russia. However, crude-oil prices declined amid worries about waning expectations for demand amid global growth worries.
Which stocks are in focus?
Shares of Uber Technologies Inc. could be in focus Tuesday after Stifel analysts initiated coverage of the ride-hailing company with a hold rating and a price target of $50, or 13% above its current trading level. Separately, they raised their target on buy-rated Lyft Inc. LYFT, -2.15% shares to $76 from $70. Uber’s stock edged 0.7% lower, while ride-sharing rival’s shares Lyft Inc. lost 2.2%.
Shares of Amarin Corp. AMRN, +13.88% rallied 14%, after the pharmaceutical company raised its full-year outlook, while announcing plans to double its U.S. sales force to better market its Vascepa treatment for cardiovascular disease.
How are other markets trading?
The yield on the 10-year Treasury note TMUBMUSD10Y, -2.08% retreated to 1.985%, hanging around a near two-year low, returning to around its lowest in more than two years.
Meanwhile, Hong Kong’s Hang Seng Index HSI, +1.17% , which was closed for a holiday on Monday, gained 1.2% on Tuesday, while China’s Shanghai Composite Index SHCOMP, -0.03% finished in negative territory but close to unchanged and the CSI 300 Index 000300, +0.03% closed barely in positive territory.
European stocks booked modest gains, with the Stoxx Europe 600 SXXP, +0.37% rising 0.4%.
The U.S. dollar DXY, -0.20% was off 0.1%, while oil prices US:CLM9 tumbled more than 3% amid growing concerns about economic weakness permeating the developed world.
https://www.marketwatch.com/story/us-stock-futures-pull-back-amid-illusion-of-market-stability-after-sp-500-sets-record-2019-07-02
2019-07-02 17:38:00Z
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