Wall Street’s rally ended on Tuesday after President Donald Trump expressed his doubts about a near term solution to the lingering trade battle between the United States and China. Meanwhile, major banks reported sold second-quarter results although investors remained cautious about the possibility of an overall decline in earnings during the second quarter. All three major stock indexes ended in the red.
The Dow Jones Industrial Average (DJI) fell 0.1% to close at 27.335.63. The S&P 500 slipped 0.3% to close at 3,004.04. Meanwhile, the Nasdaq Composite Index closed at 8,222.80, declining 0.4%. The fear-gauge CBOE Volatility Index (VIX) increased 1.4% to close at 12.86. A total of 6.18 billion shares were traded on Tuesday, lower than the last 20-session average of 6.71 billion. Decliners outnumbered advancers on the NYSE by a 1.06-to-1 ratio. On Nasdaq, a 1.23-to-1 ratio favored declining issues.
How Did The Benchmarks Perform?
The Dow closed in negative territory after four straight days of gains with 20 components of the 30-stock blue-chip index closing in the red while ten finished in the green. The S&P 500 also closed in negative territory after a five-day winning streak. The Energy Select Sector SPDR (XLE) and TechnologySelect Sector SPDR (XLK) lost 1.1% and 0.9%, respectively. Notably, eight out of 11 sectors of the benchmark index closed in the red while three ended in the green. The Nasdaq Composite ended in the red after three consecutive gains due to weak performance from semiconductor stocks.
U.S.-China Trade Conflict Intensify
On Jul 16, President Trump said that a trade deal between the United States and China is a long way off, In addition, he also cast doubts about whether a deal will at all be possible or not. Trump once again threatened to impose a 25% tariff on another $325 billion of Chinese goods. Meanwhile, China has also toughened its stand on trade negotiations after adding the country’s commerce minister, Zhong Shan, known as a hard bargainer, to its negotiation team.
On Jul 15, U.S. Treasury Secretary Steven Mnuchin said he and U.S. Trade Representative Robert Lighthizer are likely to travel to Beijing next week for trade negotiations provided telephonic talks held this week are productive.
Major Banks Posts Strong Earnings Results
JPMorgan Chase & Co. JPM reported strong earnings results in the second-quarter 2019. Adjusted earnings per share came in at $2.59, surpassing the Zacks Consensus Estimate of $2.50. Revenues of $28.8 billion outpaced the Zacks Consensus Estimate of $28.4 billion. Consequently, shares of JPMorgan Chase gained 1.1%. (Read More)
The Goldman Sachs Group Inc. GS reported impressive earnings results in the second-quarter 2019. Adjusted earnings per share came in at $5.81, outpacing the Zacks Consensus Estimate of $4.73. Revenues of $9.5 billion surpassed the Zacks Consensus Estimate of $8.7 billion. Consequently, shares of The Goldman Sachs gained 1.9%. (Read More)
Wells Fargo & Co. WFC reported solid earnings results in the second-quarter 2019. Adjusted earnings per share came in at $1.30, outpacing the Zacks Consensus Estimate of $1.16. Revenues of $21.6 billion surpassed the Zacks Consensus Estimate of $20.8billion. However, shares of Wells Fargo tumbled 3% due to lower net interest income, which the company said is likely to continue. (Read More)
All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Department of Commerce reported that retail sales in June increased 0.4%, surpassing the consensus estimate of 0.2%. June marked the fourth consecutive month of retail sales growth. Year over year, retail sales grew 3.4% in June. Eleven out of 13 segments witnessed gain including 1.7% growth in online and mail delivery, 0.9% in restaurants, 0.5% in clothing and building materials stores.
The Federal Reserve reported that industrial production in June was unchanged from the previous month compared with consensus estimate of a growth of 0.1%. However, year over year, industrial production grew 1.3%. Capacity utilization in June slipped to 77.9% from 78.1 in May.
Stock That Made Headline
United Airlines Beats on Q2 Earnings, Tweaks '19 View
United Airlines Holdings Inc.’s UAL second-quarter 2019 earnings (excluding 19 cents from non-recurring items) of $4.21 per share surpassed the Zacks Consensus Estimate of $4.07. (Read More)
CSX Q2 Earnings & Revenues Miss on Soft Intermodal Revenues
CSX Corp. CSX reported second-quarter 2019 earnings of $1.08 per share, missing the Zacks Consensus Estimate of $1.11. (Read More)
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