Stocks Wobble Early Friday 07/20 09:33
US stocks are drifting between small gains and losses as traders shrug off
the latest trade threats from President Donald Trump and focus on company
earnings reports, which contained some better-than-expected results from big
names including Microsoft.
NEW YORK (AP) -- US stocks are drifting between small gains and losses as
traders shrug off the latest trade threats from President Donald Trump and
focus on company earnings reports, which contained some better-than-expected
results from big names including Microsoft. Industrial conglomerate Honeywell
is also higher. General Electric fell after saying its power business is still
struggling. The dollar fell and bond yields rose.
KEEPING SCORE: The S&P 500 index picked up 1 point to 2,805 as of 10:20 a.m.
Eastern time. The Dow Jones Industrial Average edged up 9 points to 25,074. The
Nasdaq composite rose 24 points, or 0.3 percent, to 7,849. The Russell 2000
index of smaller-company stocks was little changed at 1,702.
Stocks have wobbled this week as investors reacted to solid company results
and heightened trade tensions. The S&P 500 is up 0.2 percent for the week,
while the Russell, which is made up of more domestically-oriented companies
that could hold up better in a prolonged trade dispute, is up 0.9 percent.
MORE TARIFF TALK: In a taped interview with the business channel CNBC, Trump
said "I'm willing to go to 500," referring roughly to the $505.5 billion in
goods the U.S. imported last year from China. Earlier this month the U.S.
placed import taxes on $34 billion in goods imported from China and Beijing
responded in kind. The Trump administration is considering tariffs on another
$200 billion in goods.
The dispute between the world's two largest economies stems from accusations
that China steals technology from U.S. companies or forces them to hand over
technology to Chinese companies as well as differences over the U.S. trade
deficit with China. Investors have worried that the trade war and other
disputes involving the U.S. could slow down the global economy.
The U.S. government put tariffs on imported steel, aluminum, washing
machines and solar panels this year and is considering taxing auto imports.
Representatives of the auto industry asked Congress to oppose that move on
Thursday. Companies that sell cars and car parts continued to slip Friday
morning. General Motors fell 1 percent to $38.91 and Ford lost 1.3 percent to
$10.53. BorgWarner fell 2.2 percent to $44.02.
EARNINGS: Microsoft continued to set records after its fiscal fourth-quarter
results topped Wall Street forecasts and its cloud computing division continued
to grow. The company said it's being helped by its rivalry with Amazon, because
some retailers are reluctant to team up with Amazon on cloud computing services
while they compete with Amazon in sales. The stock climbed 2.8 percent to
General Electric lost 3.4 percent to $13.26. Elsewhere, industrial
conglomerate Honeywell rose 2.2 percent to $150.78 after it raised its forecast
for the year. Uniform supplier Cintas gained 5 percent to $203.30.
Shoe maker Skechers plunged after its estimates for the third quarter fell
far short of analyst expectations. The company said its U.S. wholesale business
and international distributor business both saw their sales drop in the last
quarter. The stock sank 23 percent to $25.61.
BONDS: Bond prices dipped. The yield on the 10-year Treasury note rose to
2.86 percent from 2.85 percent.
YUAN DECLINES: The People's Bank of China weakened the country's currency
against the dollar on Friday. If the yuan continues to depreciate, goods
exported to China will become more expensive to consumers there. Chinese
exports would also be relatively cheaper, possibly balancing out suggested
increases in tariffs by the Trump Administration. The yuan has been skidding
since February, mostly because of slower economic growth in China and rising
interest rates in the U.S.
OIL: Benchmark U.S. crude added 0.7 percent to $69.94 a barrel in New York
and Brent crude, used to price international oils, gained 0.7 percent to $73.08
a barrel in London.
OVERSEAS: European markets fell. Germany's DAX fell 1.4 percent and France's
CAC 40 dropped 0.9 percent. Britain's FTSE 100 gave up 0.3 percent. South
Korea's Kospi added 0.3 percent and Hong Kong's Hang Seng gained 0.8 percent.
Japan's Nikkei 225 fell 0.3 percent.
CURRENCIES: The dollar fell to 111.77 yen from 112.46 yen. The euro rose to
$1.1713 from $1.1644.