By Chris Matthews and William Watts, MarketWatch
IBM earnings miss weighs on the Dow
U.S. stocks traded mixed in early morning trade Wednesday, as
investors continued to process new earnings releases, while
offering a muted reaction to data that showed China's economic
growth stabilized.
What are major indexes doing?
The Dow Jones Industrial Average fell 50 points, or 0.2%, to
26,400, while the S&P 500 index fell 4 points, or 0.2%, to
2,902. The Nasdaq Composite index was off 15 points at 7,986, a
decline of 0.2%.
All three benchmarks were retreating into negative territory
after modest opening gains.
See:U.S. stock-market euphoria may be nearing a dangerous level,
says RBC strategist
(http://www.marketwatch.com/story/us-stock-market-euphoria-may-be-nearing-a-dangerous-level-says-rbc-strategist-2019-04-17)
The S&P 500 ended just 0.8% away from its all-time closing
high of 2,930.75 set on Sept. 20, while the Dow and Nasdaq each
stand around 1.4% away from their record closes set last year.
Also read:Stock market at ' risk of a melt-up, not a meltdown,'
warns BlackRock's Larry Fink
(http://www.marketwatch.com/story/blackrocks-fink-says-stock-market-at-risk-of-a-melt-up-not-a-meltdown-2019-04-16)
What's driving the market?
Investors continue to wade through corporate results as
first-quarter earnings season moves into full swing, with an
earnings miss from International Business Machines Inc. (IBM)
caused the stock to fall 4.5% Wednesday, weighing heavily on the
Dow.
Chinese government data showed the country's economy grew at a
6.4% rate, year-over-year
(http://www.marketwatch.com/story/chinas-economy-grew-64-in-q1-beating-expectations-2019-04-16)
in the first quarter of 2019, maintaining the pace seen in the last
quarter of 2018 as factory output picked up steam. The figure was
slightly higher than many economists expected.
The data failed to provide much spark to European markets, but
analysts said signs of stability could soothe investor worries
about the world's second-largest economy. Stock-market gains since
the end of last year have been tied in part to expectations
stimulus efforts by Chinese authorities and a potential deal to end
the U.S.-China trade battle would limit the scope of the country's
slowdown and alleviate fears of a global economic crunch.
What stocks are in focus?
Shares of Netflix Inc. (NFLX) rose 2.1% Wednesday morning, after
the company reported a record number of paying subscribers in the
first quarter. After the company released results Tuesday evening,
the stock turned lower on pessimism toward second-quarter guidance,
but reversed those losses after analysts began to combat that
narrative
(http://www.marketwatch.com/story/netflix-stock-climbs-premarket-as-analysts-take-a-bullish-tone-on-earnings-2019-04-17).
Read:Netflix is burning money and lacks a good business model,
this tech investor says
(http://www.marketwatch.com/story/netflix-is-burning-money-and-lacks-a-good-business-model-this-tech-investor-says-2019-04-16)
Shares of Qualcomm Inc.(QCOM) were up more than 15%, after
soaring more than 20% on Tuesday
(http://www.marketwatch.com/story/qualcomm-stock-surges-as-apple-agrees-to-settlement-2019-04-16)
after the chip maker and Apple Inc.(AAPL) settled patent litigation
against each other.
Opinion:Qualcomm gets big windfall in surprise settlement, but
Apple may have saved the iPhone from 5G doom
(http://www.marketwatch.com/story/qualcomm-gets-big-windfall-in-surprise-settlement-but-apple-may-have-saved-the-iphone-from-5g-doom-2019-04-16)
Following the settlement, chip maker Intel Corp.(INTC) said it
would get out of the business for 5G modem chips
(http://www.marketwatch.com/story/intel-drops-out-of-5g-modem-business-after-apple-qualcomm-settlement-2019-04-16)
in which it was trying to compete with Qualcomm. Intel shares were
up 2.8% Wednesday morning.
Shares of PepsiCo Inc.(PEP) were up 2%, after the beverage and
snack giant Wednesday morning reported first-quarter profit and
revenue that topped Wall Street expectations
(http://www.marketwatch.com/story/pepsicos-stock-surges-toward-record-high-after-profit-revenue-rise-above-expectations-2019-04-17).
Shares of Bank of New York Mellon Corp. (BK) fell 7.6%, after
the financial services company reported sharper declines
(http://www.marketwatch.com/story/bank-of-new-york-mellon-earnings-fall-short-2019-04-17)
in first-quarter sales and profits than Wall Street had
expected.
Morgan Stanley(MS) stock rose 1.1% Wednesday morning, after the
company reported first-quarter profit
(http://www.marketwatch.com/story/morgan-stanleys-stock-jumps-toward-7-month-high-after-profit-and-revenue-fall-less-than-expected-2019-04-17)
and revenue that fell less than expected.
Shares of United Continental Holdings Inc. (UAL) rose 4.9%,
following the airliner's release of earnings figures Tuesday
evening that beat analyst forecasts
(http://www.marketwatch.com/story/united-shares-rise-on-better-than-expected-fourth-quarter-earnings-2019-04-16).
What are the analysts saying?
"It's still much too small a sample size to generate
conclusions, but the bottom line is that earnings season is not off
to a very good start," wrote Tom Essaye, president of the Sevens
Report in a Wednesday morning research note. "While stocks are
looking past that courtesy of dovish Fed speak and hopes of better
global growth, earnings will need to get better during the next two
weeks--because so far the results, while not a disaster, aren't
that great."
What's on the economic calendar?
The U.S. trade deficit fell 3.4% in February to the lowest level
in eight months
(http://www.marketwatch.com/story/us-trade-deficit-shrinks-again-in-february-to-lowest-level-in-eight-months-2019-04-17),
the Commerce Department said Wednesday. At 10 a.m. Meanwhile,
wholesale inventories
(http://www.marketwatch.com/story/us-wholesale-inventories-climb-02-in-february-2019-04-17)
in the U.S. rose a mild 0.2% in February, the government said
Wednesday. Sales increased 0.3% in the month. The ratio of
inventories to sales was flat at 1.35.
Philadelphia Fed President Patrick Harker will give a speech on
the economic outlook at 12:30 p.m., while St. Louis Fed President
James Bullard will give a speech at the Hyman Minksy Conference in
New York at 12:45 p.m. Bullard is a voter on the Fed's
interest-rate committee this year, while Harker is not.
At 2 p.m., the Federal Reserve will issue its Beige book, a
collection of anecdotal reports from the central bank's business
districts, reflecting a snapshot of U.S. economic conditions.
How are other markets trading?
Stocks in Asia closed mostly higher on Wednesday
(http://www.marketwatch.com/story/asian-markets-mixed-in-lackluster-trading-2019-04-15),
with China's Shanghai Composite Index and Japan's Nikkei 225 both
rising 0.3%. Hong Kong's Hang Seng Index, meanwhile, ended the day
flat.
In Europe, stocks were edging higher
(http://www.marketwatch.com/story/china-growth-sees-mixed-reaction-in-europe-markets-2019-04-17),
as the Stoxx Europe 600 was rose 0.2%, while Germany's DAX and
France's CAC 40 were also up on the day.
In commodities markets, the price of crude oil was on the rise
(http://www.marketwatch.com/story/oil-snaps-back-as-preliminary-data-show-a-dip-in-us-supply-china-growth-surprises-2019-04-17),
as was gold
(http://www.marketwatch.com/story/gold-claws-up-from-lowest-point-of-the-year-but-move-limited-by-continued-stock-strength-2019-04-17).
The U.S. dollar , meanwhile, edged lower Wednesday
(http://www.marketwatch.com/story/us-dollar-edges-lower-after-stronger-than-expected-china-gdp-data-2019-04-17).
(END) Dow Jones Newswires
April 17, 2019 10:07 ET (14:07 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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