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US close: Stocks extended losses as earnings disappoint

By Iain Gilbert

Date: Wednesday 17 Jul 2019

US close: Stocks extended losses as earnings disappoint

(Sharecast News) - Wall Street stocks closed lower on Wednesday, extending the previous day's declines after comments from Donald Trump put a halt to a historic rally.
At the close, the Dow Jones Industrial Average was down 0.42% at 27,219.85, while the S&P 500 closed 0.65% weaker at 2,984.42 and the Nasdaq Composite rounded out the session 0.46% softer at 8,185.21.

The Dow closed 115.78 points lower on Wednesday after wrapping up the previous session lower following remarks from Donald Trump about the state of negotiations with China and some poorly received second-quarter earnings reports from the likes of JP Morgan and Goldman Sachs.

Powell hinted at a possible rate cut again on Tuesday, but the message was accompanied by a string of risk factors, including the federal debt limit and falling US inflation, which combined saw traders take some money off the table.

Trump also said on Tuesday that China and the US still had "a long way to go" before settling their trade dispute, brandishing again the threat of trade tariffs on an additional $325bn-worth of Chinese exports.

"We have a long way to go as far as tariffs where China is concerned, if we want. We have another $325bn we can put a tariff on, if we want," he said.

His comments came as the world's two largest economies were hoping to restart negotiations on a trade deal after Trump and Chinese President Xi Jinping agreed not to escalate tensions at last month's G-20 leaders' summit in Osaka, Japan.

The Wall Street Journal reported that the cause of the stalemate in negotiations was the US' restrictions on Chinese telco giant Huawei.

With corporate earnings season well and truly underway, Bank of America closed 0.69% stronger after it posted better-than-expected earnings on Wednesday, driven by the strength of its retail banking operation, but its CFO did warn that lower rates would hit its net interest income growth.

Elsewhere, United Airlines closed 0.92% higher after it reported earnings and revenue that came in ahead of analysts' expectations and increased the size of its share buyback program by $3.0bn, while Cintas shares saw out the session 8.74% firmer after topping expectations.

IBM shares advanced 2.29% in extended trading after topping quarterly income estimates, while Netflix slumped 10.34% after reporting a massive drop in subscriber growth.

On the data front, US housing starts were little changed last month although the details of the report were mixed.

According to the Department of Commerce, housing starts declined at a 0.9% month-on-month clip to reach an annualised rate of 1.253m, putting them 6.2% below their year-earlier level.

Housing permits meanwhile, a key lead indicator for activity in the sector, shrank by 6.1% versus May to reach 1.299m, although economists had correctly anticipated that fall.

The annualised pace of housing starts for May was revised marginally lower, from 1.269m to 1.1265m.

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