U.S. equities traded lower Monday morning on weaker-than-expected China trade data that has sparked fresh fears of a global economic slowdown.
How are major benchmarks faring?
The Dow Jones Industrial Average
slid 125 points, or 0.5%, to 23,869, while the S&P 500 index
fell 14 points, or 0.5%, to 2,582. The Nasdaq Composite Index
dropped 48 points, or 0.7%, to 6,923.
What’s driving the market?
Appetite for assets perceived as risky, such as stocks, took a hit Monday, after data showed weak China imports and exports for December, which underscored worries of a signifslowdown in the global growth engine. And China’s trade surplus with the U.S. soared to a fresh record of $323.32 billion in 2018, while the two countries continue to try resolving those differences.
Earnings season kicked off on Monday, with Citigroup Inc.
reporting its quarterly results, producing better-than-expected profit but falling below estimates on revenues. JPMorgan Chase & Co.
Wells Fargo & Co.
Goldman Sachs Group Inc.
and Netflix Inc.
are a few of the other big companies due to report this week.
Investors are jittery ahead of the start of the fourth-quarter earnings reporting season after high- profile warnings from Apple Inc.
Brexit concerns will rise to the forefront this week as U.K. lawmakers get ready to vote on Prime Minister Theresa May’s divorce deal with the European Union Tuesday. U.K. opposition leader Jeremy Corbyn said Sunday the Labour Party will push for a general election if Parliament rejects May’s deal, and that he might force a vote of no-confidence “soon.”
What are strategists saying?
“We are hitting strong resistance near the 2,600-2,630 level” for the S&P 500, Zhiwei Ren, portfolio manager at Penn Mutual Asset Management told MarketWatch.
“I was surprised by the velocity of the rally since December, and I’m skeptical that this rally” has much more momentum left, given the uncertainty that is hanging over the market with respect to slowing growth abroad and U.S-China trade tensions.
“Analysts have been backpedaling earnings expectations faster than usual in the run-up to the Q4 releases. Apple’s high-profile warning may have unduly lowered the bar for other firms,” said Jasper Lawler, head of research at London Capital Group, in a note to clients.
“Expect roughly 10% earnings growth, lower than last quarter but still very strong, albeit Q4 looks likely to be a bit patchier than the across-the-board wins we had in Q3. The effect of tax cuts will start to seen annualizing out,” he said.
Which are the stocks to watch?
Shares of PG&E Corp.
tumbled more than 49%, after the gas and electric company said it plans to file for bankruptcy on or about Jan. 29.
Gannett Co. Inc.’s stock
was up 35%, after private-equity firm MNG announced an unsolicited bid to buy the owner of USA Today, valuing the company at $1.4 billion.
Shares of Newmont Mining Corp. fell 7% after it announced plans to buy Canadian miner Goldcorp Inc.
in a deal valued at $10 billion.
Lululemon Athletica Inc.
stock was up 8.3% after the athletic-wear retailer raised its revenue and earnings guidance for the fourth quarter.
Share of Citigroup Inc.
were up 1.2%, after the bank reported a four-quarter earnings beat, though it fell short of revenue expectations.
How did the benchmarks fare Friday?
On Friday, the Dow Jones Industrial Average fell 5.97 points to 23,995.95, while the S&P 500 index slipped 0.38 point to 2,596.26. The Nasdaq Composite Index shed 14.59 points, or 0.2%, to 6,971.48.
For the week, the Dow rose 2.4%, the S&P 500 gained 2.5%, and the Nasdaq rallied 3.5%.
How are other markets trading?
Asia markets finished weaker, led by a 1.4% drop in Hong Kong’s Hang Seng Index
traded lower across the board.
A risk-off atmosphere also drove down oil prices, with West Texas Intermediate crude
for February down 0.1% to $51.56 a barrel. Gold
was bid slightly higher, up 0.1% to $1,290 an ounce, and the ICE Dollar Index
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