US STOCKS-Wall St dips as trade worries weigh; Netflix tumbles


Reuters | Washington DC | Updated: 18-07-2019 20:08 IST | Created: 18-07-2019 20:06 IST
US STOCKS-Wall St dips as trade worries weigh; Netflix tumbles
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U.S. stock indexes edged lower on Thursday as investors awaited more developments around trade, while Netflix posted a surprise drop in U.S. subscribers, kicking off earnings for the FAANG group of stocks on a sour note.

Shares of the streaming pioneer sank 11.3% and weighed on the S&P 500 and the Nasdaq as the company also missed targets for new subscribers overseas at a time when it has staked its future on global expansion. Losses in Netflix also dragged the communication services sector, one of the best-performing S&P sectors so far this year, 1.20% lower.

"Netflix did nothing to soothe investor concerns around what earnings prospects are likely to unfold over the next couple of weeks," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. The disappointing earnings so far have amplified the pressure on markets from trade worries, he said.

The three main Wall Street indexes have retreated slightly from record highs this week as second-quarter earnings rolled in. "With the run, we've had in the market, conditions have been overbought and in that light, the market has been right in releasing some of that pressure from the rally."

In trade-related news, U.S. Treasury Secretary Steven Mnuchin said U.S. and Chinese officials will hold a telephone call later on Thursday that could pave the way for further in-person trade talks. Investors also await the Federal Reserve's policy meeting at the end of July where expectations of an interest rate cut are very high.

At 10:00 a.m. ET, the Dow Jones Industrial Average was down 13.47 points, or 0.05%, at 27,206.38, the S&P 500 was down 2.60 points, or 0.09%, at 2,981.82. The Nasdaq Composite was down 16.07 points, or 0.20%, at 8,169.14. International Business Machines Corp reversed premarket losses to rise 3% as its quarterly profit beat on strong growth in its high-margin cloud business.

Gains in IBM, along with those in Apple Inc, kept the technology sector afloat. UnitedHealth Group Inc fell 1.5% following comments that the insurer would continue with its point-of-sale rebates, a week after the Trump administration pulled back an ambitious proposal to ban drug rebates.

Railroad operator Union Pacific Corp jumped 4.9% after it reported a profit beat, while tobacco company Philip Morris gained 6.8% on raising its full-year profit outlook. Morgan Stanley rose after reporting a better-than-expected quarterly profit.

Declining issues outnumbered advancers for a 1.87-to-1 ratio on the NYSE and for a 1.45-to-1 ratio on the Nasdaq. The S&P index recorded 10 new 52-week highs and four new lows, while the Nasdaq recorded 16 new highs and 40 new lows.

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(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)

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