Tuesday, 22 Sep 2020

Wall Street flat; strong GDP counters Trump-Kim summit failure

NEW YORK (Reuters) – Wall Street’s main indexes went nowhere fast on Thursday with better-than-feared GDP data providing some support to counter the abrupt end to a U.S.-North Korean summit and ongoing concerns about earnings and U.S.-China trade relations.

President Donald Trump said Thursday that he had walked out of his Vietnam summit with Kim Jong Un because of demands from the North Korean leader to lift U.S.-led sanctions.

On the same day, Commerce Department data showed that while the U.S. economy missed a 3 percent annual growth target for 2018, a better-than-expected fourth quarter pushed gross domestic product up 2.9 percent for the year.

“Right now, the push and pull is about even. Markets will stay relatively tightly rangebound. It’ll take meaningfully good or bad news for things to go up or down sharply,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “What’s pushing markets down and counterpointing GDP is the concern about corporate earnings.”

The GDP reading came ahead of the core personal consumption expenditures (PCE) data for December, the Fed’s preferred measure of inflation, due on Friday.

Pursche was unimpressed by White House economic adviser Larry Kudlow’s assurance that U.S.-China negotiations between the world’s two largest economies were moving forward after “fantastic” progress made last week.

“Unlike a month ago, where a statement by an official was probably sufficient to push stocks higher, it no longer is. It’s time for concrete progress,” he said.

At 2:59 p.m. EST, the Dow Jones Industrial Average fell 58.81 points, or 0.23 percent, to 25,926.35, the S&P 500 lost 4.98 points, or 0.18 percent, to 2,787.4 and the Nasdaq Composite dropped 10.50 points, or 0.14 percent, to 7,544.01.

Of the 11 major S&P 500 sectors, the materials sector was the biggest percentage decliner with a 1.4 percent drop, while the energy sector was the second biggest percentage loser, with a 1.2 percent fall, as crude prices eased.

In the healthcare sector, Celgene Corp fell 7.9 percent after activist investor Starboard Value LP said it will vote against drugmaker Bristol-Myers Squibb Co’s proposed $74 billion acquisition of the biotech. Bristol-Myers was up 2.5 percent.

Booking Holdings Inc fell 10.5 percent after missing quarterly earnings expectations and was among the biggest single-stock drags on the S&P and the Nasdaq.

Also dragging on the S&P was HP Inc, which plunged about 18.7 percent after it reported revenue that missed analysts’ estimates.

Monster Beverage Corp jumped 8.9 percent, making it the biggest percentage gainer on the S&P, after it beat Wall Street estimates for quarterly revenue and profit.

Declining issues outnumbered advancing ones on the NYSE by a 1.28-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored decliners.

The S&P 500 posted 40 new 52-week highs and two new lows; the Nasdaq Composite recorded 54 new highs and 30 new lows.

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