Wall St. dips as trade worries weigh; Netflix tumbles
|reuters.com 18 Jul 2019 at 07:27|
(Reuters) - U.S. stock indexes edged lower on Thursday as investors awaited more developments around trade, while Netflix posted a surprise drop in U.S. subscribers, kicking off earnings for the FAANG group of stocks on a sour note.
Traders work on the floor of the New York Stock Exchange in New York, United States, July 2, 2015. REUTERS/Brendan McDermid
Shares of the streaming pioneer ( NFLX.O ) sank 11.3% and weighed on the S&P 500 and the Nasdaq as the company also missed targets for new subscribers overseas at a time when it has staked its future on global expansion.
Losses in Netflix also dragged the communication services .SPLRCL sector, one of the best-performing S&P sectors so far this year, 1.20% lower.
“Netflix did nothing to soothe investor concerns around what earnings prospects are likely to unfold over the next couple of weeks,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.
The disappointing earnings so far have amplified the pressure on markets from trade worries, he said.
The three main Wall Street indexes have retreated slightly from record highs this week as second-quarter earnings rolled in.
“With the run we’ve had in the market, conditions have been overbought and in that light the market have been right in releasing some of that pressure from the rally.”
Investors also await the Federal Reserve’s policy meeting at the end of July where expectations of an interest rate cut are very high.
At 10:00 a.m. ET, the Dow Jones Industrial Average .DJI was down 13.47 points, or 0.05%, at 27,206.38, the S&P 500 .SPX was down 2.60 points, or 0.09%, at 2,981.82. The Nasdaq Composite .IXIC was down 16.07 points, or 0.20%, at 8,169.14.
International Business Machines Corp ( IBM.N ) reversed premarket losses to rise 3% as its quarterly profit beat on strong growth in its high-margin cloud business.
Gains in IBM, along with those in Apple Inc ( AAPL.O ), kept the technology sector .SPLRCT afloat.
UnitedHealth Group Inc ( UNH.N ) fell 1.5% following comments that the insurer would continue with its point-of-sale rebates, a week after the Trump administration pulled back an ambitious proposal to ban drug rebates.
Railroad operator Union Pacific Corp ( UNP.N ) jumped 4.9% after it reported a profit beat, while tobacco company Philip Morris ( PM.N ) gained 6.8% on raising its full-year profit outlook.
Morgan Stanley ( MS.N ) rose after reporting a better-than-expected quarterly profit.
Declining issues outnumbered advancers for a 1.87-to-1 ratio on the NYSE and for a 1.45-to-1 ratio on the Nasdaq.
The S&P index recorded 10 new 52-week highs and four new lows, while the Nasdaq recorded 16 new highs and 40 new lows.