Wall Street lower on weak earnings, escalating trade tensions
U.S. stock indexes were trading lower on Thursday, as a batch of weak quarterly reports dampened a robust earnings season and trade tensions rose on news the European Union may retaliate if United States slaps tariffs on EU cars.
EU Trade Commissioner Cecilia Malmstrom said she hoped a mission to Washington would ease the trade dispute that started after the United States imposed tariffs on EU steel and aluminum on June 1, with President Donald Trump threatening to extend them to cars and auto parts.
"Today`s theme is trade war, as the EU is going to retaliate against car tariffs and that is going to weigh," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
"The market is probably going to be defensive even though we are getting good news on the economy and as earnings continue to pour in."
Concerns about the impact of tariffs have been rising among manufacturers in every one of the Federal Reserve`s 12 districts, a central bank report released on Wednesday showed.
However, White House trade adviser Peter Navarro on CNBC downplayed tariff-related concerns, saying President Trump`s trade strategy with China, which includes levying new tariffs, is not as disruptive as many describe.
The Consumer Staples sector dropped 0.9 percent, the most among the 11 main S&P sectors.
The losses on the sector were led by a 6.3 percent drop in shares of cigarette maker Philip Morris after the company lowered full-year profit forecast. Rival Altria dropped 3.3 percent.
EBay sank 9.6 percent, the most on the benchmark S&P 500 and the Nasdaq, after reporting underwhelming results and forecast.
The biggest drag on the Dow Jones Industrial Index was Travelers Cos, which fell 3.3 percent after the insurer missed quarterly profit estimates due to higher catastrophe losses from storms in several U.S. regions.
AmEx fell 2.8 percent after the credit card company said expenses rose due to higher spending on its rewards program.
At 9:50 a.m. EDT the Dow Jones Industrial Average was down 96.18 points, or 0.38 percent, at 25,103.11, the S&P 500 was down 9.76 points, or 0.35 percent, at 2,805.86 and the Nasdaq Composite was down 22.60 points, or 0.29 percent, at 7,831.84.
IBM was a bright spot, up 4 percent after its results topped estimates due to growth in higher-margin businesses including cybersecurity and cloud computing.
Comcast gained 3.4 percent after it dropped pursuit of a group of media assets owned by Twenty-First Century Fox Inc.
Declining issues outnumbered advancers for a 1.46-to-1 ratio on the NYSE and for a 1.61-to-1 ratio on the Nasdaq.
The S&P index recorded 12 new 52-week highs and one new lows, while the Nasdaq recorded 41 new highs and 14 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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