Most of the Wall Street indexes ended today’s trading session with declines due to the negative comment of the US Secretary of State Wilbur Ross.
Earlier in the day, Ross said that China and the United States are far from signing a trade agreement. According to him, the two countries are “kilometres away” of such development and there are still many questions to be solved. His comment comes at a time when Beijing and Washington are trying to reach a permanent ceasefire by early March. If this does not happen, Donald Trump’s administration will apply additional tariffs on Chinese imports.
The blue-chip index Dow Jones Industrial Average dropped by 56 points, or 0.23%, to 24,518.73 points. The broader S&P 500 ended the trading session with a decline of 0.02% to 2,638.17 points.
The technology index Nasdaq Composite managed to finish with an increase of 0.50% to a level of 7,061.02 points.
The negative performance of Dow Jones was caused by the pharmaceutical companies Merck and Pfizer, whose shares declined at the end of the day.
Five of the 11 major S&P sectors were lower, led by losses in the consumer staples and healthcare indexes. The biggest gainer was the technology index, up by 0.79%.
On bond markets, yields on 10-year and 30-year US government bonds fell to 2.714% and 3.033%, respectively.
In the currency markets, the dollar index rose by 0.40% to 96.51 points.
Corporate stocks performance
Chip stocks powered higher on the back of upbeat quarterly results. The Philadelphia Semiconductor Index, which had underperformed 10 of the 11 S&P sectors so far this year, jumped by 5.78%.
Xilinx Inc shares surged 17.5% and LamResearch Corp jumped 14.6% after reporting better-than-expected results.
Apple supplier Texas Instruments Inc rose by 6.3% after what analysts called better-than-feared results. The company, however, warned of weak demand in China, a key market for many chipmakers.
American Airlines Group, Southwest Airlines Co and JetBlue Airways Corp gained 5% each after reporting quarterly profits that beat analysts’ expectations.
Southwest and JetBlue, however, said the partial US government shutdown, now in its 34th day, was disruptive.
McCormick & Co plunged 12.6%, the most on the S&P, after the seasonings maker’s quarterly profit missed expectations.
Intel Corp climbed 3.6% and Starbucks Corp slipped 1.8%. Both companies are scheduled to report results after the closing bell.
COrporate earnings reports
Of the 97 S&P 500 companies that have reported fourth-quarter results, 75.3% have topped profit estimates.
But the earnings growth estimates for last quarter have dropped to 14.2% from 20.1% at the start of October, while 2019 profit growth estimates have come down to 5.8% from 10.2% in the same period.
American Airlines reported a fourth-quarter profit of 319 million USD, slightly higher than analysts expected, as strong travel demand helped the carrier overcome higher fuel prices. American Airlines’ shares rose by 6% in morning trading. Airline executives said the partial government shutdown has hurt bookings, but that sales to other customers including key corporate travellers have remained strong. The company’s profit excluding special items worked out to 1.04 USD per share, 2 cents better than the average analyst estimate.
Pharmaceutical giant Bristol-Myers Squibb revenues increased by 12%. The US revenues increased for the quarter by 16% to 3.3 billion USD compared to the previous year, with international revenues increasing 3%.