U.S. stocks edged lower Tuesday morning, one day after S&P 500 notched its sixth record of the year, in the wake of a China-U.S. trade truce achieved at the G-20 meeting in Japan on Saturday. However, doubts that a substantive deal can be quickly achieved has made investors reluctant to bid stocks much higher ahead of U.S. labor-market data due Friday.
How are benchmarks faring?
The Dow Jones Industrial Average DJIA, -0.20% was off 66 points, or 0.3%, at 26,650, the S&P 500 SPX, -0.06% retreated 4 points, or 0.1%, to 2,960, while the Nasdaq Composite index COMP, -0.16% gave up 14 points to reach 8,077, a decline of 0.2%.
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 hesitant to buy more risk ahead of data on the state of the U.S. and global economy, with monthly U.S. labor market data due Friday after the July 4th holiday Thursday.
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.
Still, 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, -0.92% and Airbus SE AIR, -0.64%
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.
“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.
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.
Investors will also watch speeches from Federal Reserve policy makers John Williams, the New York Fed President, who participated in a panel discussion on the global economy and monetary policy in Zurich Tuesday morning, and Cleveland Fed President Loretta Mester, who is scheduled to speak at 11 a.m. Eastern Time, in London.
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, -1.37% shares to $76 from $70. Uber stock rose 0.3% Tuesday morning, while Lyft added 0.4%.
Shares of Amarin Corp. AMRN, +6.03% Plc rallied 6.3%, 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, -0.51% was at 2.01%, hanging around a near two-year low.
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 traded modestly higher, with the Stoxx Europe 600 SXXP, +0.23% rising 0.2%.
The U.S. dollar DXY, -0.12% was off 0.1%, while gold prices US:GCM9 gained some altitude, up 0.4%, after booking the biggest daily loss in a year.
Oil prices US:CLM9 traded slightly lower after the OPEC meeting.
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 13:49:00Z
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