Stocks Drop as Earnings Roll In; Treasuries Climb: Markets Wrap
A trader works on the floor of the New York Stock Exchange (NYSE) in New York, U.S. (Photographer: Michael Nagle/Bloomberg)

Stocks Drop as Earnings Roll In; Treasuries Climb: Markets Wrap

(Bloomberg) -- U.S. stocks fell as investors assessed mixed corporate earnings amid concern over the U.S.-China trade spat. Treasuries rallied.

Industrials led the S&P 500 Index below 3,000, with CSX Corp. plunging 10% after a weakened sales forecast stoked fears of a prolonged freight slump. The Dow Jones Transportation Average, a barometer of economic growth, tumbled. Bank of America Corp. advanced as gains in its retail division drove overall profit to a record. In after-hours trading, Netflix Inc. sank on a surprise loss of U.S. customers for the second quarter, while International Business Machines Corp. climbed as its operating earnings beat analysts’ estimates.

While early indications are usually unreliable when it comes to corporate profits, investors have closely watched those reports for clues on the state of the world’s largest economy amid the threat of a trade war. Market sentiment was clearly dented after President Donald Trump said Tuesday he could impose more tariffs on China, pushing stocks down from a record high.

Stocks Drop as Earnings Roll In; Treasuries Climb: Markets Wrap

“Stocks’ strong gains are finally succumbing to profit-taking,” said Alec Young, managing director of global markets research at FTSE Russell. “Earnings and guidance so far have been mixed and, given the big run-up, it’s no surprise there’s little investor tolerance for even a hint of disappointment.”

The U.S. economy expanded at a modest pace with job gains slowing somewhat and inflation remaining stable or slightly weaker, a Federal Reserve survey showed. The report is unlikely to sway the debate policy makers will have during the July 30-31 meeting. They’re expected to reduce rates by a quarter point, though a handful of regional Fed presidents appear uneasy about a cut.

Elsewhere, oil sank after a mixed U.S. government report showed a surprising drop in fuel demand last week. Bitcoin climbed, while still trading below $10,000.

Here are some key events coming up:

  • Monetary policy decisions are due in Indonesia, South Korea and South Africa on Thursday.

These are the main moves in markets:

Stocks

  • The S&P 500 lost 0.7% to 2,984.42 at 4 p.m. New York time.
  • The Stoxx Europe 600 Index slid 0.4%.
  • The MSCI Asia Pacific Index fell 0.1%.

Currencies

  • The Bloomberg Dollar Spot Index decreased 0.1%.
  • The euro rose 0.1% to $1.1223.
  • The Japanese yen increased 0.2% to 108.03 per dollar.

Bonds

  • The yield on 10-year Treasuries decreased five basis points to 2.05%.
  • Germany’s 10-year yield sank five basis points to -0.29%.
  • Britain’s 10-year yield fell six basis points to 0.759%.

Commodities

  • The Bloomberg Commodity Index fell 0.1%.
  • West Texas Intermediate crude dipped 1.5% to $56.78 a barrel.
  • Gold rose 0.9% to $1,423.30 an ounce.

©2019 Bloomberg L.P.

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