The main Wall Street stock indexes dropped at the end of today’s trading session, despite the positive US economic data. The good news about the growth of the US economy was offset by the failed talks between US President Donald Trump and North Korean leader Kim Jong-Un.
The blue-chip benchmark Dow Jones Industrial Average declined by 69.16 points to 25,916 after UnitedHealth wiped out 50 points from the index.
The broader S&P 500 declined by nearly 0.3% to 2,784.49 points, while the Nasdaq Composite also lost about 0.3% to 7,532.53 points. The shares of Facebook, Apple, and Netflix fell by more than 0.5%.
The CBOE Volatility Index, which measures the implied volatility of S&P 500 options, was down 0.87% to 14.78.
The US economy has cooled less than expected in the last quarter of last year, thanks to the growth in business investment. This suggests that growth may remain strong for a long time, especially after the change in the Federal Reserve’s approach to monetary policy.
The annual GDP growth in the period October-December 2018 was 2.6%, with an average estimate of economists for a growth of 2.2%. Compared to the third quarter, however, the delay is clearly visible. It was then reported a growth of 3.4%, according to the data of the Ministry of Commerce.
Another key topic in the focus of investors is the failed meeting between US President Donald Trump and North Korean leader Kim Jong-Un. The possibility of raising the tariffs weighs on the world markets and forces US companies to consider relocation of activities from China. At the same time, Beijing was under pressure to negotiate a ceasefire.
On this background, the yields on 10-year and 30-year US Treasuries rose to 2.713% and 3.08% respectively.
Corporate stocks performance
The best performers of the session on the Dow Jones Industrial Average were Boeing, which rose 1.04%, and Pfizer, which added 0.98%. Meanwhile, the worst performers were UnitedHealth Group (-3.14%), DowDuPont (-2.72%) and Caterpillar (-1.60%)
Into the S&P 500, Monster Beverage Corp added 8.67%, Universal Health Services added 4.26% and Southwest Airlines Company gained by 4.07%. However, Booking Holdings lost 10.96% and Celgene Corporation wiped out 8.65% of its market capitalization. The shares of HP Inc fell by 17.2% after the company reported its quarterly results that did not meet expectations.
Falling stocks outnumbered advancing ones on the New York Stock Exchange by 1661 to 1317 and 125 ended unchanged. On the Nasdaq Stock Exchange, 1508 fell and 1125 advanced, while 95 ended unchanged.
The stocks of technology giants FAANG (Facebook, Apple, Amazon, Netflix, and Google) were also mostly into the red. Facebook wiped out 0.84%, Apple decreased by 0.98%, Netflix sank 1.3% and Amazon decreased slightly by 0.07%. The only winner from the group during the trading session was Google’s parent, Alphabet, which rose by 0.33%.
The stocks of car manufacturers also ended with decreases, although recovering the early loses. The shares of Daimler decreased by 0.42%, while those of Ford Motor wiped out 0.11%.
Corporate earnings reports
J. C. Penney Company announced financial results for its fiscal fourth quarter and full year ended February 2, 2019. On a shifted basis, which compares the 13 weeks ended February 2, 2019, and February 3, 2018, the comparable sales decreased by 4.0%. On an unshifted basis, comparable sales for the fourth quarter decreased by 6.0%. For the full year, comparable sales dropped by 3.1%. The total net sales for fiscal 2018 decreased by 7.1% to 11.66 billion USD. The net income of the company for the quarter was 75 million USD, or 0.24 USD per share, and net loss for the full year was 255 million USD, or 0.81 USD per share.