sunny.png
Sunday August 18th, 2019 8:23PM

Stocks fizzle and flatten out after early gains

By The Associated Press
Related Articles
  Contact Editor

NEW YORK (AP) — U.S. stocks gave up early gains and flattened in afternoon trading Tuesday on Wall Street, weighed down by technology and industrial companies.

The market is trying to extend a five-day winning streak that has so far helped recoup much of May's sharp losses. In mid-afternoon, stocks were nearly evenly split between winners and losers.

A slide in industrial stocks helped trim the early gains. Defense contractors were the biggest decliners, marking a turnaround from a day earlier when a megadeal between Raytheon and United Technologies gave the sector a lift.

Technology stocks turned lower after leading the market earlier. Adobe fell 2.2% and Advanced Micro Devices fell 3%.

Consumer-related stocks and internet companies balanced the market with gains. Facebook rose 1.9% and Verizon gained 1.8%. Walgreens rose 1.4% and Dollar Tree rose 2.2%.

Stocks had been rallying since last week, when the Federal Reserve signaled that it is open to cutting rates to stabilize the economy if trade disputes threaten the economic recovery. A lackluster U.S. jobs report appeared to increase the odds that a rate cut will happen sooner rather than later.

Investors grew more hopeful Monday after President Donald Trump suspended plans to impose tariffs on Mexican goods after the countries struck a deal on immigration. Trump also plans to meet with Chinese President Xi Jinping in Japan later this month to discuss the two countries' ongoing trade war.

KEEPING SCORE: The S&P 500 index rose 0.1% as of 2:05 p.m. Eastern time. The Dow Jones Industrial Average rose 14 points, or 0.1%, to 26,079. The Nasdaq composite rose 0.1%.

ANALYST'S TAKE: The trade war between the U.S. and China has no neat resolution in sight and investors will have to get use to uncertainty hanging over the market.

"The market's going to be really sensitive to trade news," said Katie Nixon, chief investment officer at Northern Trust Wealth Management. "This is going to be very hard to resolve neatly and quickly."

The dispute has highlighted just how complex global supply chains and intertwining national interests have become, she said.

The U.S. and Chinese economies were already on a path for slower growth before the trade war, she said, but the escalation and uncertainty have added "fragility" in the growth outlook.

"The concern is that because of the trade standoff, more companies will hunker down and delay spending and hiring," she said.

Meanwhile, The bond market has been sending the Fed a clear message that the central bank is behind the curve on lowering rates. The volatile market, weak economic data and higher bond prices are all potential catalysts for a rate change.

"The tea leaves are all there for them to read, if they want to read them," she said.

TRIMMING THE (FAUX) FAT: Beyond Meat fell 21.9% after J.P. Morgan's Ken Goldman and James Allen downgraded the stock to "neutral." The downgrade follows a surge in the stock price from $25 to $167 since the maker of plant-based meat alternatives started trading publicly on May 2.

The sharp rise in price cost short sellers about $400 million, according to the research firm S3.

In a note to clients Tuesday, Goldman and Allen said the downgrade was "purely a valuation call."

HAPPY RETURNS: Tax preparer H&R Block rose 2.6% after hitting investors with a triple-dose of solidly good news. The company beat fiscal fourth quarter profit expectations, raised its quarterly dividend and announced an acquisition.

GOOD GRUB: GrubHub jumped 8.2% after the online food service company got some relief from competitive pressures.

Amazon is closing its U.S. restaurant delivery service, a 4-year-old business that failed to take off. The sector is highly competitive and includes Uber Eats and Door Dash, along with GrubHub and others.

The service, called Amazon Restaurants, offered delivery in more than 20 cities in the U.S. It was expanded into the United Kingdom, but Amazon shut it down late last year.

DEFENSE DOWN: Defense contractors dragged down the broader industrial sector. The slide marks a reverse from a day earlier when Raytheon and United Technologies announced a megadeal that will create a defense contracting powerhouse. Raytheon fell 4.4% and United Technologies fell 3.3%

Several other defense contractors turned lower in midday trading. Lockheed Martin fell 2.0% and Northrop Grumman fell 3.5%.

  • Associated Categories: Associated Press (AP), AP Business, AP Business - Corporate News, AP Business - Economy, AP Business - Financial Markets
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
As bishops gather, prosecutors step up scrutiny of church
Attorneys general eyeing U.S. church authorities in growing clergy abuse investigations
2:30PM ( 10 minutes ago )
Seen as pro-business, Macron shifts to the left at UN body
French President Emmanuel Macron called for an EU-wide minimum wage and a stepped-up fight against inequality, returning to his left-leaning political roots as critics try to paint him as overly pro-business
2:21PM ( 18 minutes ago )
2020 candidate Pete Buttigieg lays out foreign policy vision
Democratic presidential candidate Pete Buttigieg wants to repeal the 2001 authorization for use of force in Iraq and Afghanistan, calling it a 'blank check' that has led to an 'endless war'
2:21PM ( 18 minutes ago )
Associated Press (AP)
Rep. Omar filed joint tax returns before she married husband
Minnesota campaign finance officials say that U.S. Rep. Ilhan Omar filed joint tax returns with her current husband years before they were legally married and at a time when she was married to another man
1:55PM ( 45 minutes ago )
Biden, Trump assailing each other in dueling Iowa visits
Biden, Trump swap insults in dueling visits to Iowa
1:45PM ( 54 minutes ago )
US resident released from Iran custody says it eases tension
A U.S. permanent resident who was released in Iran following years of imprisonment on charges of espionage said Tuesday that he was subjected to "kidnapping, arbitrary detention and a show trial"
1:36PM ( 1 hour ago )
AP Business
Tech on trial: House panel begins review of market power
The House Judiciary Committee is set to launch its probe into the market dominance of Silicon Valley's biggest names, starting with a look at the impact of the giants' platforms on news outlets.
11:42AM ( 2 hours ago )
US lawsuit filed over deadly fire at London's Grenfell Tower
A lawsuit filed in the U.S. says faulty building materials helped spread a devastating fire at London's Grenfell Tower in 2017
11:36AM ( 3 hours ago )
Detained US resident freed by Iran arrives in native Lebanon
Beirut official: US resident and Lebanese businessman imprisoned for years in Iran freed, on his way back to his native Lebanon
10:41AM ( 3 hours ago )
AP Business - Corporate News
Biden assailing Trump on trade as both come to Iowa
Biden is assailing Trump on trade and branding him an 'existential threat to America' as both come to Iowa
12:08PM ( 2 hours ago )
Trump and Biden head to Iowa in a potential 2020 preview
President Donald Trump and Democratic presidential candidate Joe Biden to visit Iowa, where Biden plans to criticize Trump's economic policy
10:08AM ( 4 hours ago )
The Latest: White House says Biden threat remark 'laughable'
The White House says Joe Biden's plan to call President Donald Trump an 'existential threat' to the nation is 'truly laughable' as the 2 politicians converge in Iowa
9:23AM ( 5 hours ago )
AP Business - Economy
Asian shares rise as Trump plans to meet Chinese leader
Asian shares are mostly higher as investor jitters over trade eased after U.S. President Donald Trump suspended plans to impose tariffs on Mexican imports and said he expects to meet with the Chinese leader
2:31AM ( 12 hours ago )
US stocks climb after US suspends tariffs on Mexican goods
Technology companies and banks helped power stocks higher on Wall Street Monday as investors welcomed news that the U.S. and Mexico averted a trade war and potentially damaging tariffs
5:05PM ( 21 hours ago )
Stocks rise after US deal with Mexico; car companies gain
Technology companies are helping power stocks higher on Wall Street in late-afternoon trading after the U.S. and Mexico averted a trade war and potentially damaging tariffs
3:45PM ( 22 hours ago )
AP Business - Financial Markets
As bishops gather, prosecutors step up scrutiny of church
Attorneys general eyeing U.S. church authorities in growing clergy abuse investigations
2:30PM ( 10 minutes ago )
Seen as pro-business, Macron shifts to the left at UN body
French President Emmanuel Macron called for an EU-wide minimum wage and a stepped-up fight against inequality, returning to his left-leaning political roots as critics try to paint him as overly pro-business
2:21PM ( 18 minutes ago )
2020 candidate Pete Buttigieg lays out foreign policy vision
Democratic presidential candidate Pete Buttigieg wants to repeal the 2001 authorization for use of force in Iraq and Afghanistan, calling it a 'blank check' that has led to an 'endless war'
2:21PM ( 18 minutes ago )
Southern Baptists meet; sex abuse crisis tops agenda
The Southern Baptist Convention opens a national meeting expected to be dominated by discussion of a large-scale sex-abuse crisis
2:17PM ( 22 minutes ago )
Pucks and ponies abroad: Olczyk to work first Royal Ascot
Pucks and ponies abroad: Olczyk to work first Royal Ascot a week after Game 7 of Stanley Cup Final
2:10PM ( 30 minutes ago )