Stock Market News For Jul 23, 2018

U.S. equity benchmarks ended in negative territory on Friday after Trump reignited fears about a trade war between the U.S. and its foreign counterparts. Trump also showed immense displeasure with the Fed's policy of hiking rates gradually. However, the day's losses were limited due to strong Q2 earnings results. For the week, the Dow and the S&P 500 managed to eke out gains, but, the Nasdaq failed to do the same and closed in the red.

The Dow Jones Industrial Average (DJI) closed at 25,058.12, decreasing 6.38 points. The S&P 500 Index (INX) declined 0.1% to close at 2,801.83. The Nasdaq Composite Index (IXIC) closed at 7,820.20, also shedding 0.1%. A total of 6 billion shares were traded on Friday, lower than the last 20-session average of 6.42 billion shares. Decliners outnumbered advancers on the NYSE by 1.12-to-1 ratio. On the Nasdaq, decliners had an edge over advancers by 1.11-to-1 ratio. The CBOE VIX decreased 0.1% to close at 12.86.

How Did the Benchmarks Perform?

The Dow was down by 6.38 points. Notably, 17 components of the 30-stock blue-chip index closed in the red while 13 traded in the green.

The S&P 500 dropped 0.1% led by 0.9% decline in Real Estate Select Sector SPDR (XLRE), 0.7% loss in Utilities Select Sector SPDR (XLU) and 0.4% decrease of both Consumer Discretionary Select Sector SPDR (XLY) as well as Materials Select Sector SPDR (XLB). Notably, eight out of 11 sectors of the benchmark index ended in negative territory.

Nasdaq Composite lost 0.1% due to broad-based market decline.

Trade War Fear Reignites

In an interview to CNBC on Jul 20, President Trump said his administration will not hesitate to impose tariffs on $505 billion worth of Chinses goods should the need arise. Notably, the amount of Chinses goods exported into the United States in 2017 was $505 billion while U.S. export to China was only $129.9 billion.

Trump also warned the European Union of dire consequences if his meeting with EU officials next week doesn't yield what he considers a fair auto trade deal. Trump has hinted that the U.S. government may raise tariffs on auto products from 2.5% to 20% imported from the European Union. The European Union is reportedly considering a list of U.S. products on which tariffs can be imposed to counter Trump's auto tariffs.

Strong Earnings Momentum

The second-quarter 2018 earnings season has been a robust one so far. Till Jul 20, 87 S&P 500 members have reported their quarterly results. Total earnings for these 87 companies were up 20.9% from the same period last year on 10.3% higher revenues.

Software behemoth Microsoft Corp. MSFT reported fourth-quarter fiscal 2018 adjusted earnings of $1.13 per share, beating the Zacks Consensus Estimate of $1.07. Consequently, the stock price of Microsoft was up 1.9%. ( Read More )

Diversified manufacturing giant Honeywell International Inc. HON reported fiscal second-quarter adjusted earnings per share of $2.12, better-than-the Zacks Consensus Estimate of $2.01. As a result, the stock price of Honeywell was up 3.8%. ( Read More )

You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here .

Weekly Round Up

Last week was a mixed one in Wall Street. The Dow and S&P 500 gained marginally 0.2% and less than 0.1%, respectively, while the tech-laden Nasdaq Composite recorded a weekly loss of less than 0.1%.

A rally among tech stocks coupled with strong second-quarter earnings results helped the blue-chip index and the broader S&P 500 close in the green. But, as Trump upped the ante on trade tensions, investor concerns spiked, eventually dragging the risk sensitive Nasdaq Composite into the red.

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

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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