U.S. Stocks Waver, Pressured by Utilities and Energy Firms
09 August 2018 - 5:58AM
Dow Jones News
By Ben St. Clair and Allison Prang
U.S. stocks waffled between small gains and losses Wednesday as
shares of utilities and energy companies slumped and the S&P
500 hovered just below its all-time high.
The broad stock-market index rose less than 0.1% after closing
at its second-highest level ever Tuesday. The S&P 500 is about
0.5% away from its January high. The Dow Jones Industrial Average
dropped 29 points, or 0.1%, to 25600, while the Nasdaq Composite
rose 0.1%.
Investors continue to parse corporate-earnings results, with the
bulk of companies done reporting numbers for the most recent
quarter. The long-running uncertainty over trade also pressed on as
the Trump administration completed plans Tuesday to impose tariffs
on an additional $16 billion of Chinese imports. The penalties,
which were widely expected and would take effect Aug. 23, bring the
total amount of Chinese goods covered by tariffs to $50
billion.
Still, U.S. economic data have pointed to a strong economy, and
investors have remained hesitantly optimistic as companies this
year have reported positive earnings growth, pushing the S&P
500 up 3.6% in the past month. Unfilled jobs are growing in nearly
every industry amid an expanding economy and a historically low
unemployment rate, which was 3.9% last month. The problem is most
acute in a few fields, led by transportation.
Ryan Kelley, portfolio manager at Hennessy Funds, said earnings
are "somewhat old news" given that most companies in the broader
index have already reported results but said, "we're very
encouraged" that fundamentals are what's fueling the market.
"Trade continues to be an issue," but it isn't clear how tariffs
are going to affect earnings, Mr. Kelley said.
Shares of energy companies were the worst performers in the
S&P 500, with the sector losing 0.9% as oil prices tumbled.
U.S. crude for September delivery settled down 3.2% at $66.94 a
barrel after data showed total U.S. stockpiles of oil and fuel hit
a seven-month high, suggesting supply was outpacing demand.
Declines in the utilities and consumer-staples sectors also
dragged on the broad index, while the financials, tech and
health-care sectors edged higher.
Shares of Snap fell 5.2% after the company posted its first
quarterly decline in users. Alternatively, shares of CVS Health
rose 4.2% after adjusted earnings, revenue and same-store sales all
beat estimates for the latest quarter.
Shares of Walt Disney fell 2% after the media company reported
adjusted earnings and revenue that missed estimates amid a ramp-up
in spending.
"The factor that's driving markets are earnings," said Neil
Veitch, global investment director at SVM Asset Management. "The
market, particularly in the U.S., continues to grind higher," added
Mr. Veitch, who like many investors is optimistic about growth
prospects.
Elsewhere, the Stoxx Europe 600 slipped 0.2%. Japan's Nikkei
Stock Average edged down 0.1%, while Hong Kong's Hang Seng climbed
0.4%. The Shanghai Composite Index fell 1.3%.
Write to Allison Prang at allison.prang@wsj.com
(END) Dow Jones Newswires
August 08, 2018 15:43 ET (19:43 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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