Stocks end little changed amid trade, housing sales data
U.S. stocks were mixed following reports Thursday that President Donald Trump and President Xi Jinping are set to push back a meeting investors had hoped would produce a U.S.-China trade deal. Meanwhile, a reading on new-home sales for January dipped to a three-year low.
The S&P 500 (^GSPC) fell 0.09%, or 2.44 points, as of market close, with the Materials sector leading declines and the Financial sector outperforming. The Dow (^DJI) rose 0.03%, or 7.05 points, while the Nasdaq (^IXIC) edged down 0.16%, or 12.5 points.
An anticipated meeting between Trump and Xi is likely to occur in April at the earliest, Bloomberg reported Thursday, citing unnamed people familiar with the matter. Earlier reports had suggested that the U.S. and China were closing in on a trade deal that could come as soon as this month. U.S. Trade Representative Robert Lighthizer signaled earlier this week that there were still unresolved issues with China, but the U.S. was making “headway” on issues relating to technology transfer and other structural changes that have been at the center of Washington’s concerns.
“Markets had hoped, perhaps naively, that some sort of deal might be done soon, but it appears that they will be denied this particular bullish catalyst for the time being,” Chris Beauchamp, chief market analyst at IG Group, wrote in an email. However, he added that U.S. markets have “been in bullish form over the past few days.” The S&P 500 is up more than 12% for the year-to-date.
“While big drivers, such as earnings, have dried up, the relative lack of volatility and ongoing economic growth mean that a grind higher remains a distinct possibility for the time being,” Beauchamp said.
But in China, the latest signs of sluggishness in the economy came as data Thursday showed that industrial output fell to a 17-year low in the first two months of 2019, with output rising 5.3% versus 5.5% expected. Other new data, however, was more optimistic and pointed to an uptick in property investment and stable retail sales. The Chinese government has also recently stepped in to help boost the economy, and Premier Li Keqiang last week unveiled a stimulus package involving hundreds of billions of dollars in additional tax cuts and infrastructure spending.
Elsewhere, members of the UK Parliament voted Thursday to delay Brexit for at least three months, setting Prime Minister Theresa May up for another meeting with EU officials to request an extension to the deadline originally set for March 29. This comes after MPs voted Wednesday to avoid a no-deal Brexit, and after lawmakers on Tuesday rejected May’s revised Brexit plan. May will hold another “meaningful vote” on her withdrawal agreement next week, which will help determine how long the extension will last.
STOCKS
General Electric (GE) provided earnings guidance for 2019 that fell short of consensus expectations and said it would see as much as $2 billion in negative free cash flow in its industrial segment this year. However, CEO Larry Culp said in a statement that the company expects to see positive free cash flow in the industrial unit in 2020 and 2021 “as headwinds diminish and our operation improvements yield financial results.” The company sees full-year 2019 adjusted earnings of between 50 cents and 60 cents, short of Bloomberg-compiled consensus estimates of 67 cents. GE Industrial segment organic revenues are expected to grow in the low- to mid-single-digit range for the year, and adjusted margin in the segment is seen to expand in a range of flat to up 100 basis points.
Facebook (FB) is entangled in a criminal investigation with federal prosecutors probing data deals the social media giant carried out with other major tech companies, the New York Times reported Wednesday. According to the report, a grand jury in New York has subpoenaed records from at least two smartphone and device-makers who partnered with Facebook and gained access to personal information for hundreds of millions of its users.
Boeing’s (BA) orders with some international carriers hang in flux amid an ongoing investigation into the cause of the crash of Ethiopian Airlines Flight 302, which had involved a BA 737 Max 8 jet. VietJet said it planned to reassess future plans to use the 737 Max 8 jet, after doubling an order for 737 Max jets just last month. Bloomberg also reported that Kenya Airways is considering switching to Boeing rival Airbus and using the latter’s A320. This comes as the U.S. on Wednesday joined a swathe of other nations in grounding the 737 Max 8 jet following an executive order from Trump and subsequent statement from the Federal Aviation Administration.
ECONOMY
Import prices in the U.S. rose a greater-than-expected 0.6% month-over-month, the Bureau of Labor Statistics reported Thursday, above the 0.3% increase expected. Much of the increase was driven by fuel import prices, which rose 4.9% in February, the largest monthly advance since May. Non-fuel imports registered no change in February after a 0.3% decline in January, as rising prices for consumer goods and non-fuel industrial supplies and materials offset declines in prices for food, beverages and capital goods. Year-over-year, however, headline import prices fell 1.3% in February. January’s import price increase was upwardly revised to 0.1% month-over-month, from negative 0.5% previously.
Export prices rose 0.6% month-over-month in February, following an upwardly revised decrease of 0.5% in January. Consensus expectations had been for a 0.1% increase in February. Over the past year, export prices are up 0.3%.
New-home sales declined to a three-month low in January, falling 6.9% to a seasonally adjusted pace of 607,000, the Census Bureau reported Thursday. This fell short of consensus estimates for an annualized pace of 622,000, based on Bloomberg data. New-home sales for the month prior were upwardly revised by 31,000 to 652,000. The median sale price for new homes in January fell 3.8% to $317,200.
New jobless claims rose slightly more-than-expected for the week ending March 9, with claims rising 229,000 for the week, or 4,000 ahead of expectations. The previous week’s 223,000 figure was left unrevised. The latest reading brings the four-week moving average down by 2,500 to 223,750.
Continuing jobless claims for the week ending March 2 also increased more-than-expected to 1.776 million, versus 1.763 million expected. The week prior’s continuing claims figure was upwardly revised to 1.758 million.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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