Wall Street on track to snap recent run of gains after weak data

By Caroline Valetkevitch NEW YORK (Reuters) - Weak economic data pressured U.S. stocks on Thursday after a recent run of gains, while a drop in healthcare shares added to the bearish momentum. The Commerce Department said new orders for key U.S.-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth

Reuters February 22, 2019 03:05:22 IST
Wall Street on track to snap recent run of gains after weak data

Wall Street on track to snap recent run of gains after weak data

By Caroline Valetkevitch

NEW YORK (Reuters) - Weak economic data pressured U.S. stocks on Thursday after a recent run of gains, while a drop in healthcare shares added to the bearish momentum.

The Commerce Department said new orders for key U.S.-made capital goods unexpectedly fell in December, pointing to a further slowdown in business spending on equipment that could crimp economic growth.

Another set showed the Philadelphia Federal Reserve's gauge on U.S. Mid-Atlantic business activity declined in February to its weakest level since May 2016.

Also, the Atlanta Federal Reserve's GDPNow forecast model showed U.S. economy likely expanded at a 1.4 percent annualised rate in the fourth quarter.

"I was a little surprised by some of the weakness in the data. Some of it is weather related and some trade related, so it's hard to get a good feel for how it would be," without those factors, said Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago.

But he said the decline in stocks is likely the result of profit-taking.

"We've had a tremendous run in the market, and we had weak data that allowed investors to take some profits," he said.

Recent gains have been driven by of progress in U.S.-China trade talks. Despite the dip, the index continues to hover near two-month highs.

The United States and China have started to outline commitments in principle on the stickiest issues in their trade dispute, marking the most significant progress yet toward ending a seven-month trade war, sources told Reuters on Thursday. The two sides were trying to reach agreement before March 1, Reuters reported.

The Dow Jones Industrial Average fell 148.88 points, or 0.57 percent, to 25,805.56, the S&P 500 lost 15.04 points, or 0.54 percent, to 2,769.66 and the Nasdaq Composite dropped 41.58 points, or 0.56 percent, to 7,447.49.

Healthcare sector slid 1.1 percent, weighed down by Johnson & Johnson's 1.1 percent fall.

The healthcare giant said it received subpoenas from U.S. regulators related to litigation involving alleged asbestos contamination in its signature baby powder product line.

Nike Inc shares were down 1.3 percent after the company's sneaker worn by emerging basketball star Zion Williamson split in half during a game.

Declining issues outnumbered advancing ones on the NYSE by a 2.01-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favoured decliners.

The S&P 500 posted 34 new 52-week highs and no new lows; the Nasdaq Composite recorded 62 new highs and 13 new lows.

(Additional reporting by Shreyashi Sanyal and Sruthi Shankar in Bengaluru; Editing by Anil D'Silva and Cynthia Osterman)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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