Wall Street indexes declined on Wednesday amid recent Federal Reserve messages, the US-China trade relations, as well as a number of geopolitical issues.
The blue-chip index Dow Jones Industrial Average wiped out 72.75 points, or 0.28%, to 25,985.23 points. The broad S&P 500 is down by 0.05% mainly due to the communications services sector. The technological index Nasdaq Composite remained relatively stable.
The statement of the US Trade Representative Robert Lighthizer that trade deal with China is still not certain, had a negative effect on the markets’ sentiment. He was testifying in front of the House Ways and Means committee. Robert Lighthizer warned “much work still needs to be done” and said it’s “too early” to predict the outcome of recent negotiations between the two superpowers. He added that any deal concluded in March would take a long process of implementation.
Trade tensions between the US and China have weakened this week after President Donald Trump extended the deadline for reaching trade agreement and introducing new customs duties on Chinese goods in the absence of an agreement.
The market participants also focused on the latest messages from Federal Reserve Governor Jerome Powell. He warned that growth would be slower despite the current stability of the US economy. Powell added that the central bank is ready to adjust its policy if it is justified. Powell described the economic outlook for the United States as favorable but facing the challenges of external markets.
The geopolitics held the focus of the markets during the day. The tensions between India and Pakistan increased as the two sides exchanged air strikes in Kashmir.
Meanwhile, there is a summit between Trump and North Korean leader Kim Jong-un. The key question is whether we can put an end to the deadlock over Pyongyang’s nuclear weapons.
Corporate stocks performance
Stocks recovered most of an early loss and drifted to a mixed finish on Wall Street as gains for banks and industrial companies were offset by losses elsewhere in the market. Capital One Financial rose by 1.7% Wednesday, and Boeing climbed 2%. UnitedHealth Group fell by 4.9%.
The shares on Facebook and Netflix fell. The stocks of Facebook dropped by 0.80%, while Netflix decreased by 0.58%. Meanwhile, Apple, Alphabet, and Amazon appreciated by 0.3%, 0.1% and 0.3%, respectively.
The shares of the retailer Lowe rose 2% after the quarterly results of the company.
Home Depot extended a losing streak to three trading sessions with an over-1.5% decline. Home Depot stock is below its long-term 200-day line after Tuesday’s disappointing earnings results.
HP Inc’s shares declined as much as 13% after the company warned that sales for its high-margin printer supplies business would fall for the rest of the year, presenting a setback for its effort to boost profitability.
Corporate earnings reports
The retailer Lowe reported a net loss of 824 million USD, compared with a profit of 554 million USD for the comparable quarter a year prior. The company said it had a net loss of 1.03 USD per share, compared with a profit of 0.67 USD per share. North Carolina-based Lowe’s booked 1.6 billion USD in pre-tax charges during the fourth quarter ending February 1, including a 952 million USD goodwill impairment charge related to operations in Canada. Another 208 million USD was tied to the closure of all Orchard Supply Hardware stores, which Lowe’s announced in August.
The technology giant HP Inc posted 803 million USD in profit for its first three-month period of its fiscal 2019, roughly 0.51 USD per share. On an adjusted basis after taking into account restructuring costs and other factors, the company’s earnings reached about 0.52 USD per share. The cloud services provider also brought in revenue of 14.71 billion USD for the period, about 200 million USD more than it did in the year-ago period. HP added that for its second quarter of the fiscal year, it sees its adjusted earnings in the range of 0.50 to 0.53 USD per share.