Stock Rally Fizzles After Dow's Best Day Since April
23 August 2017 - 5:09PM
Dow Jones News
By Riva Gold and Amrith Ramkumar
-- Dow Jones Industrial Average edges lower after best day since April
-- Mexican peso under pressure after President Trump's comments
-- Lowe's shares drop after earnings
Disappointing earnings and political turbulence put renewed
pressure on U.S. stocks Wednesday.
The Dow Jones Industrial Average fell 58 points, or 0.3%, to
21842 after its largest one-day advance since April, and the
S&P 500 shed 0.2%. The Nasdaq Composite declined 0.2% following
the tech-heavy index's best session in more than a month.
Company reports drove some of the day's biggest moves in
individual stocks. Lowe's was among the worst performers in the
S&P 500, falling roughly 6% after the home-improvement retailer
posted earnings that fell below analyst expectations and lowered
its outlook for the year. Home Depot shares fell 1.5%, slicing
roughly 15 points off the Dow industrials.
Coty was an S&P 500 laggard for the second straight day
after reporting weak beauty sales in the most recent quarter.
Shares fell more than 8%.
Some analysts and investors said Mr. Trump's threat to shut down
the government to secure funding for a wall on the southwest border
contributed to Wednesday's declines.
"That's giving investors a bit of a cautious stance," said
Michael Hans, chief investment officer at Clarfeld Financial
Advisors. "There's no panicked feeling of risk-off. It's just a
little bit of a pullback and caution," he said.
Last week, some weak earnings and fallout from Mr. Trump's
comments about the protests in Charlottesville, Va., weighed on
stocks as several business leaders distanced themselves from the
president.
Some said a quiet period with few economic data releases also
was partially responsible for recent market jitters. The Dow jumped
nearly 200 points on Tuesday as shares rebounded from a recent
dip.
"With valuations elevated here, the market is going to be more
vulnerable to short-term negative news and negative shocks," said
Katie Nixon, chief investment officer at Northern Trust Wealth
Management.
"But unless something really impacts the economy, it's unlikely
that the market impact will be long-lasting," she said, given the
current state of growth and corporate earnings.
The Mexican peso, among the year's best-performing currencies,
dropped 0.3% against the dollar after Mr. Trump's comments, while
gold climbed 0.2% as assets seen as safer stores of value found
favor.
Government bonds rose, with the yield on the 10-year U.S.
Treasury note falling to 2.183%, according to Tradeweb, from 2.215%
Tuesday. Yields fall as prices rise.
Elsewhere, the Stoxx Europe 600 edged down 0.5% following its
best session in over a week. The media sector led declines as
shares of WPP, the world's largest advertising company, fell 11%
after it lowered its forecast for the full year, reflecting a wider
slowdown in industries such as consumer goods and retail.
Asian shares erased early gains to close little changed. Japan's
Nikkei Stock Average jumped from its lowest close in months but
pared gains to 0.3% as the yen rose against the dollar.
The Shanghai Composite Index declined less than 0.1%, ending a
four-day rally, with steel and precious-metals stocks the biggest
decliners. Trading in Hong Kong was halted as Typhoon Hato passed
by the city.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
August 23, 2017 11:54 ET (15:54 GMT)
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