Wall Street indexes ended Monday trading session with declines in anticipation for the start of the reporting season.
The blue-chip index Dow Jones Industrial Average lost nearly 84 points. The broader benchmark S&P 500 reported a slight increase of 0.10%. The technological Nasdaq Composite ended trading on green territory with an increase of 0.19%.
The retreats of the Wall Street indexes at the beginning of the week happens after two consecutive weeks of growth. The development of US-China trade talks and strong labor market data in the United States backed Wall Street on Friday. US President Donald Trump said that Washington would know in four weeks whether a trade agreement with China could be reached. Meanwhile, the Ministry of Labor announced that 196,000 new jobs were created in March.
The US factory orders fell by 0.5% in February, steeper than the 0.4% decline forecast by the economists. The data show that growth in the manufacturing continues to expand but manufacturers are becoming more cautious.
Investor focus will be on the publication of quarterly corporate reports. The reporting season starts on Friday with earnings statements of J.P. Morgan Chase and Wells Fargo. Wall Street expects this reporting season to be tough. According to FactSet, the profits of S&P 500 companies will fall by an average of 4.2% on an annual basis. This will be the first contraction in S&P 500 earnings from the second quarter of 2016.
meanwhile, the yields on 10-year bonds rose to about 2.51%, while 30-year Treasuries rose to 2.926%.
Corporate stocks performance
The shares of Boeing fell by more than 4% after Bank of America Merrill Lynch downgraded the company’s rating to a “neutral” buy.
The crisis with Boeing 737 MAX affected seriously Southwest Airlines, which has more MAX 8 planes in its fleet than any other US carrier. The shares of the company dropped 2.5% to 51.94 USD after Raymond James downgraded the airline to market perform from outperform.
The stocks of General Electric fell by more than 5% after J.P. Morgan lowered its rating.
Shares of Zillow Group rose by 0.8% after analysts at Cowen upgraded the stock to outperform.
New Age Beverage Corp shot up 38.6% on news that it would expand its tea and coffee brand Marley with WalmartInc.
Snap Inc gained 3.6% following RBC Capital Markets’ upgrade of the stock to “outperform”.
The drugmaker Histogenics Corp soared 56.0% on news it would merge with privately-held Ocugen Inc.
Meanwhile, the image sharing platform Pinterest set a price range for its coming initial public offering at between 15 USD and 17 USD. The online-imaging company is slated to go public next week on the New York Stock Exchange. It would sell 75 million shares in its initial public offering.
Corporate earnings reports
the leading international manufacturer and supplier of green energy products ReneSola reported a net loss for the fourth quarter. The revenues of the solar energy company suffered severely from a decline in new projects and delay in the sale of completed projects. Meanwhile, the bottom line came in above analysts’ forecast and the company’s stock gained sharply in early trading Monday. The China-based tech firm reported revenues of 5.6 million USD for the three-month period, which is sharply lower compared to the fourth quarter of 2017 and far below analysts’ forecast. ReneSola reported a net loss of 4.34 million USD or 0.01 USD per share for the quarter, compared to a profit of 1.7 million USD in the year-ago quarter. Adding to the weak bottom-line performance, operating expenses more than doubled to 4.76 million USD during the quarter.