U.S. stocks fell Monday morning as investors face a big week for corporate quarterly results and economic data, following an extended holiday weekend. A jump in crude-oil prices as the U.S. said it would end waivers for countries that import Iranian crude also was on investors’s radar.
How are indexes faring?
The Dow Jones Industrial Average DJIA, -0.21% fell 72 points, or 0.3%, to 26,492, while the S&P 500 index SPX, -0.07% slipped 5 points, or 0.2%, to 2,900. The Nasdaq Composite index COMP, -0.07% fell 21 points, or 0.3%, to 7,976.
Last week, stocks finished out the week mostly higher. The S&P 500 shed about 0.1% but the Dow climbed 0.6% and the Nasdaq gained 0.2%.
What’s driving the market?
U.S. markets were closed in observance of Good Friday, and most European stock markets will remain closed for Easter Monday.
Some 150 S&P 500 companies are due to report this week,with Kleenex parent Kimberly-Clark Corp. KMB, +6.16% getting things started Monday morning by reporting first-quarter adjusted earnings and sales that declined less than expected. The stock’s 4.6% rise was outpacing the rest of the S&P 500.
Weighing on the Dow, meanwhile, were shares of Shares of Boeing Co. BA, -0.54% after charges of lax safety tied to the production of the aircraft maker’s 787 Dreamliner, according to an article in the New York Times on Saturday. The report comes in the wake of the grounding of the 737 Max jets, already in the spotlight after two fatal crashes.
Among the big names reporting for the rest of the week, Coca-Cola Co. KO, -0.06% Twitter Inc. TWTR, -0.68% Facebook Inc. FB, +0.81% Amazon.com Inc. AMZN, +0.31% Microsoft Corp. MSFT, +0.18% Starbucks Corp. SBUX, -0.53% and Ford Motor Co. F, -0.65% are also due to report quarterly results this week.
So far, investors have seen first-quarter results from 15% of the S&P 500 firms, and 78% of those reported better-than-expected earnings, better than the five year average, according to FactSet. Potentially weighing on investor sentiment, however, is that just 53% of companies have reported sales above estimates, below the five-year average.
Losses for stock futures were in contrast to climbing oil prices. West Texas Intermediate crude futures CLK9, +2.48% jumped $1.51, or 2.4%, to $65.51 a barrel, while Brent crude futures LCOM9, +2.74% surged $1.81, or 2.5%, to $73.79 a barrel. Gains came after reports that the U.S. will stop issuing waivers for countries to import Iranian oil, with an announcement possibly as soon as Monday.
Meanwhile, investors hoping the Chinese government would sustain aggressive stimulus that helped it beat first-quarter growth expectations had reason for disappointment, following a report over the weekend in the South China Morning Post which stated that “senior communist leaders” are happy with the measures so far taken to “save the country’s economy from a hard landing,” and will now focus on structural reforms rather than more stimulus, news that could weigh on global equities, analysts say.
What data are in focus?
The Chicago Fed national activity index rose to negative 0.15 March from negative 0.31 in February. A zero value indicates the national economy expanding at is trend rate of growth while negative values indicate below-trend growth and positive readings above-trend.
A report on existing home sales for March is due at 10 a.m. Eastern Time.
What are analysts saying?
“With the S&P 500 forward PE (price-to-earnings) ratio sitting near highs of 16.8 and the Index 1.2% below its historic record, investors need convincing results to keep buying equities at their current levels,” said Hussein Sayed, chief market strategist at FXTM, in a note to clients.
“The Federal Reserve has limits on what it can do to tighten monetary policy, and loosening policy may not happen unless we see serious signs of declining inflation, which is not the case at the moment. That’s why a disappointment in results this week may lead to a sharp correction in equity prices,” said Sayed.
What stocks are in focus?
Halliburton Co. HAL, -0.93% shares were in focus, after the company reported earnings and revenue declines that were better than Wall Street had been expecting. The stock rose 2.1% early Monday.
Shares of Tesla Inc. TSLA, -3.36% fell 2% Monday. The electric-car company is reportedly investigating a video from Shanghai that appeared to show a parked Tesla auto catching fire.
Tesla will hold an Autonomy Day on Monday, in which the electric-car maker is expected to unveil the company’s latest efforts aimed at self-driving technology. It comes just two days before first-quarter results, which are expected to show a loss owing to sagging sales of its vehicles.
Tesla earnings: The big question is how big is the quarterly loss
Shares of KeyW Holding Corp. KEYW, +42.49% rallied 42.8% early Monday, after the after the engineering and technology company announced a deal to be acquired by Jacobs Engineering Group Inc. JEC, +0.45% in a deal valued at $815 million, including $272 million in debt.
Bed Bath & Beyond Inc. BBBY, -3.30% stock was in focus Monday, after the retailer announced that it would shake up the composition of its board in response to shareholder pressure. Shares fell 0.1% Monday morning.
How are other markets trading?
The Shanghai Composite SHCOMP, -1.70% fell 1.7% and the CSI 300 Index 000300, -2.31% fell 2.3% in Asian trading, while major European stock markets remained closed for an extended Easter break.
Gold pries GCM9, +0.10% rose 0.2% to $1,278, while the ICE Dollar Index DXY, -0.06% fell against its peers.
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https://www.marketwatch.com/story/us-stock-futures-point-to-losses-at-the-start-of-post-easter-trading-2019-04-22
2019-04-22 14:28:00Z
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