U.S. stocks closed mostly lower as trade war concerns escalated further. Moreover, investors waited for the Fed’s monetary policy statementdue late on Wednesday. Both the S&P 500 and Nasdaq Composite ended in the red while the Dow managed to finish the green.
The Dow Jones Industrial Average (DJI) closed at 24,579.96, gaining 0.2%. However, the S&P 500 Index (INX) declined 0.2% to close at 2,640. The Nasdaq Composite Index (IXIC) closed at 7,028.29, losing 0.8%. A total of 6.7 billion shares were traded on Tuesday, lower than the last 20-session average of 7.6 billion shares. Advancers outnumbered decliners on the NYSE by 1.42-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.23-to-1 ratio. The CBOE VIX increased 1.4% to close at 19.13.
How Did the Benchmarks Perform?
The Dow ended in positive territory reversing some of previous day’s losses. Notably, 18 stocks of the 30-stocks blue-chip index finished in the green while twelve ended in red. The tech-heavy Nasdaq Composite ended in the red for second-straight day, due to weak performance by large tech stocks.
The S&P 500 closed in negative territory for the second consecutive days. The Technology Select Sector SPDR (XLK) lost 1% while Communication Services Select Sector SPDR (XLC) dropped 1.2%. However, Industrials Select Sector SPDR (XLI) gained 1.4%. Notably, seven out of 11 sectors of the benchmark index closed in the green while the remaining four in the red.
Trade-related Tensions Escalate
On Jan 28, the U.S. Department of Justice filed criminal charges against Chinese telecom behemoth Huawei Technology’s CFO Meng Wanzhou and the daughter of the company’s founder and President Ren Zhengfei. The Justice Department is seeking the extradition of Meng Wanzhou from Canada. Huawei was charged for violating U.S. sanctions on Iran and a 2014 civil trade secrets lawsuit filed by T-Mobile US Inc. TMUS for stealing trade secrets. T-Mobile carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
A major concern for the Trump administration is that China is stealing intellectual property from U.S. companies by unfair means. This is the central point of trade conflict between the two largest trading countries of the world. Notably, the two countries are currently going through a 90-day truce period related to imposition of fresh tariffs on each other. The deadline will come to an end on Mar 1.
Fed’s Monetary Policy in Focus
Investors also awaited the outcome of a two-day Federal Reserve meeting which started on Jan 29. It is widely expected that there will be no changes in the key interest rates at this meeting. After the conclusion of the meeting, Fed Chief, Jerome Powell is scheduled to hold a news conference on Jan 30 and is expected to shed light on the future of monetary policy in America. Notably, the Fed has already hinted at adopting a dovish monetary stance in 2019.
The S&P/Case-Shiller 20-city index increased a seasonally adjusted 0.3% in November 2018. Year over year, the index grew 4.7%, its slowest annual growth rate since January 2015.
The Conference Board Consumer Confidence Index decreased to 120.2 in January from 126.6 in December, The consensus estimate was 125.3. The Present Situation Index – indicating consumers' assessment of current business and labor market conditions – declined from 169.9 in December to 169.6 in January. Importantly, the Expectations Index – indicating consumers' short-term outlook for income, business and labor market conditions – decreased from 97.7 in December to 87.3 in January.
Stocks That Made Headline
Canadian National Beats on Q4 Earnings, Hikes Dividend
Canadian National Railway Co. CNI delivered impressive fourth-quarter 2018 results, with earnings and revenues beating the Zacks Consensus Estimate. (Read More)
C.H. Robinson Q4 Earnings Top, Revenues Lag Estimates
C.H. Robinson Worldwide, Inc.’s CHRW fourth-quarter 2018 earnings per share of $1.34 beat the Zacks Consensus Estimate of $1.20. (Read More)
Stryker Q4 Earnings Beat, International Revenues Surge
Stryker Corp. SYK delivered fourth-quarter 2018 adjusted earnings per share (EPS) of $2.18, beating the Zacks Consensus Estimate by 1.4%. (Read More)
Robert Half Q4 Earnings, Revenues Top Estimates, Up Y/Y
Robert Half International Inc. RHI reported strong fourth-quarter 2018 results with earnings and revenues surpassing the Zacks Consensus Estimate. (Read More)
Zacks' Top 10 Stocks for 2019
In addition to the stocks discussed above, wouldn't you like to know about our 10 finest buy-and-holds for the year?
From more than 4,000 companies covered by the Zacks Rank, these 10 were picked by a process that consistently beats the market. Even during 2018 while the market dropped -5.2%, our Top 10s were up well into double-digits. And during bullish 2012 – 2017, they soared far above the market's +126.3%, reaching +181.9%.
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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
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