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Jan 24, 2017

WAll Street at Close Report on January 23, 2017: Stock Market Closes Lower as Trup Uncertainty Rattles Investors


 
Anora Mahmudova, Wallace Witkowski
 
U.S. stocks closed down Monday, but off session lows of the day as investors wrestled with uncertainty over the policies of President Donald Trump and as a batch of corporate quarterly results came out mixed.

The Dow Jones Industrial Average DJIA, -0.14%  closed down 27.40 points, or 0.1%, at 19,799.85, with General Electric Co. GE, -2.55% shares leading losses with a 2.6% decline. Earlier, the blue-chip average had been off by as many as 95 points. Another Dow component McDonald’s Corp. MCD, -0.72%  also weighed even after the fast-food giant reported earnings that beat expectations.
The S&P 500 SPX, -0.27%  fell 6.11 points, or 0.3%, to close at 2,265.20, with six of the main 11 sectors trading lower. Energy shares were hit hardest as oil prices sank, with industrials the second poorest performers. Earlier in the session, the index had been down 14 points.
The Nasdaq Composite Index COMP, -0.04%  closed down 2.39 points at 5,552.94, after being down by as many as 33 points earlier, weighed down by a selloff in biotechnology shares with the iShares Nasdaq Biotechnology ETF IBB, -0.94% down 0.9%.
Stocks initially pared losses as the first official Trump administration news briefing, hosted by Press Secretary Sean Spicer, got under way Monday, following a weekend of protests across the country and world in the wake of Trump’s inauguration. That modest paring of losses stalled but picked up again heading into the close.
Trump promised to cut regulations by 75% and renegotiate trade deals at a Monday morning meeting with business leaders from companies, including Ford Motor Co. F, -0.40%  and Dow Chemical Co. DOW, -0.42% to discuss ways to create U.S. jobs and boost the economy.
Fulfilling a campaign promise, Trump signed an order officially pulling the U.S. out of the Trans-Pacific Partnership. Congress had never ratified the agreement.
On deck, Trump has set up meetings with Canadian and Mexican leaders, and will host U.K. Prime Minister Theresa May on Friday to lay the groundwork for a trade pact.
“It’s still early stages of Trump’s administration and so far it’s all sound bites and not real action. People should pay attention to what he accomplishes in the first 100 days in office and not so much to what he says,” said Maris Ogg, president at Tower Bridge Advisors.
On the earnings front, she said, “the fourth-quarter numbers are coming in fine, but we are a little concerned about first-quarter earnings as the rapid rise in the dollar would have impacted companies, especially international companies.”
Need to know: ‘Bond King’ says look east if you’re nervous about the U.S. bull market under Trump
A swath of S&P 500 components, 34, are scheduled to report results this week, including a few Dow components. Of the 54 companies that have reported so far, 74% are beating earnings estimates by a median of 5%, according to Fundstrat.
On the earnings front, “investors will not only be watching for continued signs of improving sales and earnings, but also will closely analyze just what management teams are saying about their outlook for their businesses under the new administration,” wrote Andrew Adams, market strategist at Raymond James in emailed notes.
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Some fear the postelection rally for stocks may continue to unwind if Trump doesn’t start to get more specific about his fiscal plans.
Read: All investment decisions must be re-evaluated as the Trump era dawns
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Stock movers: Halliburton Co. HAL, -2.92%  shares dropped 2.9% as the company beat profit expectations, but posted a sales miss.
See: Jeff Reeves on 6 tech stocks that could move big on earnings
Foxconn Technology Group 2354, +0.80% may build a display-panel manufacturing facility in the U.S. as part of a joint venture with Apple Inc. AAPL, +0.07% worth up to 50,000 jobs, the company’s chairman said Sunday.
Shares of Humana Inc. HUM, +2.24%  and Aetna Inc. AET, -2.72%  both fell following reports that the merger between the two insurers has been blocked. Aetna shares closed down 2.7%, but Humana shares bounced back and closed up 2.2%.
Qualcomm Inc. QCOM, -12.72%  shares plunged 13% after Apple Inc. filed a lawsuit for $1 billion late Friday, alleging the company sought “onerous” terms in a chip deal.
AMC Entertainment Holding Inc. AMC, -0.58%  announced Monday a deal to buy Stockholm-based Nordic Cinema Group Holding AB for the equivalent of $292 million in cash.
Other markets: European stocks SXXP, +0.25%  finished lower, while in Asia, the Nikkei 225 NIK, -0.55%  lost 1.3% on yen strength. The 10-year Treasury yield TMUBMUSD10Y, +1.27%  moved lower, falling 6 basis points to 2.40%. The dollar DXY, +0.48%  moved lower across the board, while dollar-priced gold GCH7, -0.34% which can benefits from weakness in the buck, settled up 0.9% at $1,215.60 an ounce.
Oil prices CLH7, +0.45%  settled down 0.9% at $52.75 a barrel after a short-lived boost from Saudi Arabia, whose oil officials expressed confidence that a deal to cut production is putting a dent on excess supply.
—Barbara Kollmeyer in Madrid contributed to this article.