Close Update: Stocks Roiled by Retail Sales, 'Deadlocked' Trade Negotiations

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Wall Street's major indices were mostly lower on Thursday as worrisome headlines about "deadlocked" US/China trade talks and concerns about the health of the US economy rattled risk averse investors. Led by losses in component stock Coca-Cola ( KO ), the Dow Jones Industrial Average closed with a triple-digit loss but above its lows of the day.

The worst retail sales report in a decade coupled with remarks from Fed Governor Lael Brainard that downside risks to the economy have increased drove the major indices sharply lower in premarket trade and threatened a five-day winning streak for the Nasdaq Composite.

Retail sales fell 1.2% versus the consensus estimate for a modest gain of 0.1%. Excluding autos, retail sales fell 1.8% and were off 1.4% excluding both autos and gasoline sales. Subsequently, the Atlanta Fed, Goldman Sachs and Barclays all lowered their Q4 GDP forecasts by as much as 0.7%.

Stocks perked up on NEC director Larry Kudlow's upbeat assessment of trade talks, but turned lower when Bloomberg cited sources saying talks were "deadlocked" and that both countries are "far apart" on structural reforms.

Conflicting headlines about President Donald Trump's border wall and likely legal challenges from Democrats stifled price action until the close when selling accelerated leaving the blue chip index more than 100 points in the red.

Inflation and labor market data released at 8:30am ET was upstaged by the bombshell retail sales data. Initial unemployment claims increased by 4,000 to 239,000 for the week ended Feb 9 versus 225,000 estimates; and the producer price index fell 0.1% in January, missing expectations for a gain of 0.2%. Excluding food and fuel, wholesale prices were up 0.3%.

Additionally, business inventories were down 0.1% in November from the month prior while sales fell 0.3%.

In corporate news, Amazon ( AMZN ) ditched its plans to build a second headquarters in Long Island City amid local opposition to its hefty tax incentives and likely impact on local infrastructure.

JP Morgan ( JPM ) is cashing in on the cryptocurrency craze with the launch of JPM Coin. The digital currency will be pegged to the US dollar and initially available to only institutional investors.

For Friday, data includes the Empire State manufacturing index, import and export prices, industrial production and capacity utilization, and the Univ of Michigan consumer sentiment index.

Also, Atlanta Fed president Raphael Bostic will give a speech on workforce development to the Public Affairs Research Council of Alabama.


Dow Jones Industrial Average down 103.88 points (-0.41%)

S&P 500 was down 7.30 points (-0.27%)

Nasdaq Composite Index was up 6.58 points (+0.09%)


FTSE 100 was up 0.09%

Nikkei 225 was down 0.02%

Hang Seng Index was down 0.23%

Shanghai China Composite Index was down 0.05%


(+) IVC (+61.84%) Reported better-than-expected Q4 results

(+) CYBR (+20.47%) Beat Q4 estimates, issued upbeat Q1 guidance

(+) PRPO (+18.91%) Reported 66% increase in FY18 sales

(+) SOLO (+11.89%) Favorable Bloomberg report comparing Solo electric vehicle with Tesla ( TSLA )


(-) MTFB (-72.89%) FDA won't accept NDA for iclaprim in its current state

(-) SWIR (-26.90%) Missed Q4 estimates and issued downbeat Q1 guidance

(-) INO (-21.15%) Priced $65 million senior notes offering

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Copyright (C) 2016 All rights reserved. Unauthorized reproduction is strictly prohibited.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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