While you were sleeping: Mixed signals weigh on Wall St

Wednesday 23rd May 2018

Wall Street fell, having retreated from earlier gains, amid conflicting messages from the Trump administration about trade talks with China and doubt about the summit with North Korea.

In 3.41pm trading in New York, the Dow Jones Industrial Average slid 0.6 percent, while the Nasdaq Composite Index fell 0.1 percent. In 3.27pm trading, the Standard & Poor’s 500 Index inched 0.1 percent lower.

“We are getting mixed signals from the administration, and that’s why everyone is a little cautious in reacting to the headlines,” Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, told Reuters.

“It makes people less enthusiastic and there has been nothing that has truly alarmed people yet,” according to O’Rourke. “Investors are at a point where they’re taking everything that is said tentatively, with a grain of salt.”

The Dow fell as declines in shares of Boeing and the Home Depot, recently down 2 percent and 1.4 percent respectively, outweighed gains in shares of JPMorgan Chase and those of Verizon Communications, recently up 1.3 percent and 1 percent respectively.

Shares of Kohl’s dropped, down 6.7 percent as of 3.12pm in New York, after the retailer’s upgraded outlook for full-year earnings failed to impress.

The increase in the earnings forecast was not as high as it could have been, given Kohl’s strong performance in the first quarter, Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, told Reuters. “It looks like they’re looking for the stores not to perform like they did this quarter going forward,” she said.

US Treasuries fell, lifting yields on the 10-year note one basis point to 3.06 percent.

Crude also retreated from earlier gains. OPEC may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, Reuters reported, citing OPEC and oil industry sources familiar with the discussions.

Gulf OPEC countries are leading the initial talks on when the exporting group can boost oil production to cool the oil market after crude rose above US$80 a barrel last week, and how many barrels each member can add, the sources said, according to Reuters.

In Europe, Stoxx 600 Index ended the day with a 0.3 percent advance from the previous close.

Germany’s DAX Index gained 0.7 percent, led by an 8.8 percent rally in shares of Thyssenkrupp after Bloomberg reported, citing people familiar with the matter, that Elliott Management is building a stake in the engineering company and would like to replace the company’s Chief Executive Officer Heinrich Hiesinger.

The UK’s FTSE 100 Index rose 0.2 percent, while France’s CAC 40 Index added 0.1 percent.

(BusinessDesk)

Comments from our readers

No comments yet