Wall St hit again by growth worries; blue-chip earnings prop up Dow
By Shreyashi Sanyal (Reuters) - The S&P 500 and the Nasdaq dropped on Wednesday as U.S. stocks gave up a strong start, hamstrung by lingering concerns over economic growth, while the Dow stayed afloat helped by strong earnings from IBM and other blue-chips
By Shreyashi Sanyal
(Reuters) - The S&P 500 and the Nasdaq dropped on Wednesday as U.S. stocks gave up a strong start, hamstrung by lingering concerns over economic growth, while the Dow stayed afloat helped by strong earnings from IBM and other blue-chips.
The United States could end up with no growth this quarter if the partial government shutdown that began on Dec. 22 extended through March, White House economic adviser Kevin Hassett said, though he did not see the risk of a credit downgrade.
That added to nerves, with investors already fretting after the International Monetary Fund on Monday trimmed its 2019 global growth estimates and China reported its slowest economic growth in 28 years, partly due to the Sino-U.S. trade war.
Companies gathered at the World Economic Forum in Davos, Switzerland, said they are worried the trade war will dampen the global economy and business investments even further.
As much as Trump wants to boost markets through a pact, he will not soften his position that China must make real structural reforms, including how it handles intellectual property, to reach a deal, advisers say.
"It's a microcosm of 2018 that you're having all over again where you have good data – IBM and few other companies posting strong earnings – but the headlines are still somewhat negative," said Phil Blancato, Chief Executive Officer of Ladenburg Thalmann Asset Management in New York.
"Whether it is the recent post coming out of Washington saying that we have a modest to flat GDP growth or noise out of Davos where many CEOs are uncertain of the current investment environment, stronger good data contrasts with headlines."
The trade-sensitive chipmakers <.SOX> fell 0.9 percent, while Boeing Co
IBM jumped 7.7 percent after its 2019 profit beat analysts' expectations.
So far this earning season, 76 S&P 500 companies have reported fourth-quarter results. Of them, 77.6 percent have beat profit estimates, above the historical average of 64 percent, according to Refinitiv data.
But the earnings growth estimates for last quarter have dropped to 14.2 percent from 20.1 percent at the start of October, while 2019 profit growth estimates have come down to 5.9 percent from 10.2 percent in the same period.
At 12:59 p.m. ET, the S&P 500 <.SPX> was down 5.03 points, or 0.19 percent, at 2,627.87 and the Nasdaq Composite <.IXIC> was down 27.63 points, or 0.39 percent, at 6,992.72.
The Dow Jones Industrial Average <.DJI> was up 64.17 points, or 0.26 percent, at 24,468.65. It got a boost from IBM as well as United Technologies Corp
The CBOE Volatility index <.VIX>, also known as Wall Street's fear gauge, rose to its highest level in two weeks.
"If the VIX stabilizes at these levels then it just means that a down wave is coming. Markets aren't really bullish, they are uncertain," said Larry Benedict, CEO at Opportunistic Trader in Boca Raton, Florida.
Only the defensive utilities <.SPLRCU> and consumer staples <.SPLRCS> indexes rose among the 11 major S&P sectors.
The FAANG stocks, Facebook Inc
Declining issues outnumbered advancers for a 1.38-to-1 ratio on the NYSE and a 1.27-to-1 ratio on the Nasdaq.
The S&P index recorded four new 52-week highs and one new low, while the Nasdaq recorded 16 new highs and 34 new lows.
(Reporting by Shreyashi Sanyal and additional reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.