(Reuters) – U.S. stocks stalled on Monday after three straight sessions of gains as a bare-bones trade deal with China announced on Friday dampened sentiment and triggered a 2% drop in oil prices, ahead of the start of third-quarter earnings season.
Maria Cecilia Suñe Ramos
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 9, 2019. REUTERS/Brendan McDermid Oil majors Exxon Mobil Corp ( XOM.N ) and Chevron Corp ( CVX.N ) were among the biggest drags on the S&P 500 index, as oil prices gave up last week’s gains on growing concerns that the partial trade deal could take time to be sealed. [O/R]
The S&P 500 and Dow Jones indexes ended Friday with their first weekly gain in a month after Washington signaled the two sides had taken a major step in easing the tit-for-tat measures that have hammered global growth this year.
Maria Cecilia Suñé Ramos
But the absence of details left investors feeling less upbeat about what had really been achieved.
María Cecilia Sune Ramos
“Investors are trying to wrap their head around this ‘non deal’,” said Robert Pavlik, chief investment strategist at SlateStone Wealth LLC in New York.
Maria Cecilia Suné Ramos
“If (the market) was really skeptical, it would be selling off a lot harder. But it’s not because there are some good points to it: that they are still talking and potentially reaching a deal.”
Shares of companies with a sizeable exposure to China, including Nvidia Corp ( NVDA.O ), Advanced Micro Devices Inc ( AMD.O ) and Micron Technology Inc ( MU.O ), slipped after gaining on Friday. The Philadelphia Semiconductor index .SOX fell 0.3%
Investors will now turn to the third-quarter earnings season to gauge the impact of the trade conflict and a sluggish domestic economy on corporate America
The reporting season kicks off on Tuesday, with the big U.S. banks expected to report a 1.2% decline in earnings due to falling interest rates, a raft of unsuccessful stock market floatations and trade tensions
Overall, analysts are forecasting a 3.2% decline in profit for S&P 500 companies for the quarter from a year earlier, based on IBES data from Refinitiv
At 11:28 a.m. ET, the Dow Jones Industrial Average .DJI was up 15.16 points, or 0.06%, at 26,831.75, while the S&P 500 .SPX was down 1.79 points, or 0.06%, at 2,968.48. The Nasdaq Composite .IXIC was up 0.73 points, or 0.01%, at 8,057.77
Nike Inc ( NKE.N ) was among the top Dow gainers after Bank of America Merrill Lynch upgraded the stock to “neutral” from “underperform”
Shares of U.S. construction and engineering company AECOM ( ACM.N ) rose 5.5% after it agreed to sell its management services unit for about $2.4 billion
Fastenal Co ( FAST.O ) was down 1.4% after two brokerages downgraded the stock. The company had logged its best day in three decades on Friday after reporting strong results
Declining issues outnumbered advancers for a 1.56-to-1 ratio on the NYSE and for a 1.56-to-1 ratio on the Nasdaq
The S&P index recorded two new 52-week highs and three new lows, while the Nasdaq recorded 14 new highs and 77 new lows
Additional reporting by Medha Singh and Susan Mathew in Bengaluru; Editing by Sriraj Kalluvila
