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US open: McDonald's weighs on Dow, S&P 500 and Nasdaq turn green

By Iain Gilbert

Date: Tuesday 22 Oct 2019

US open: McDonald's weighs on Dow, S&P 500 and Nasdaq turn green

(Sharecast News) - Wall Street trading began on a slightly mixed note on Tuesday as investors continued to focus on US-Sino trade news and thumbed through a slew of earnings from some of the country's top firms.
As of 1530 BST, the Dow Jones Industrial Average was down 0.08% at 26,806.08, while the S&P 500 was 0.19% stronger at 3,012.57 and the Nasdaq Composite came out of the gate 0.12% firmer at 8,172.87.

The Dow Jones opened 21.56 points weaker on Tuesday after closing higher in the previous session thanks to positive headlines around the US-China trade talks emanating from Beijing and Washington and increasing optimism that the UK would be able to avoid crashing out of the European Union.

China's vice-premier Liu He said that Beijing and Washington had made "substantial progress" in trade talks over the weekend and less than 24 hours later, Donald Trump sounded an optimistic note regarding the chances of the pair striking a trade agreement by the middle of November.

During a Cabinet meeting at the White House on Monday, Trump also said that China had started making the purchases of US agricultural products that he had pushed for as part of a deal.

However, IG analyst Chris Beauchamp said: "The ongoing détente between the US and China has helped equities to power higher over the past two weeks, fitting the usual seasonal pattern, but actual progress is still lacking, leaving stocks vulnerable to some weakness.

"If they can navigate the next few days then the seasonal outlook becomes even stronger, and perhaps some post-earnings disappointment or a sulk in the wake of the FOMC meeting this month might also provide a fresh buying opportunity for investors."

Elsewhere, market participants remained focused on Brexit as UK Prime Minister Boris Johnson's deal faced its first parliamentary hurdle.

On the data front, US home sales dropped more than forecast during September as the market continued to deal with a lack of properties for sale - and most notably, cheaper ones.

The National Association of Realtors revealed that existing home sales had fallen 2.2% to a seasonally adjusted annual rate of 5.38m units last month, reversing two consecutive months of gains. Economists had forecast a decline of 0.7% to 5.45m units.

Elsewhere, the Richmond Fed Manufacturing Index topped market expectations by a wide margin.

According to the Federal Reserve Bank of Richmond, economic activity in the manufacturing sector of the Fifth District expanded at a solid pace throughout October - with the headline Composite Index rebounding to 8 from -9 in September and beating expectations for a reading of -14.

In corporate news, United Technologies and Procter & Gamble shares were up in early trade after their latest quarterly results, while McDonald's weighed on the Dow after losing 3.3% on the back of a quarterly earnings miss.

JetBlue, UPS and Lockheed Martin all topped expectations on the Street with their own results.

Still to come, Snap, Hasbro and Chipotle will report their latest quarterly earnings later on Tuesday.


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