U.S. stocks were putting in a mixed performance Thursday as investors digested quarterly earnings results and watched for impact from a nearly one-month partial shutdown of the government.
How are benchmarks faring?
The Dow Jones Industrial Average DJIA, -0.03% fell 34 points, or 0.1%, to 24,174, while the S&P 500 index SPX, +0.24% edged up 24 points, or 0.1%, to 2,619 in choppy trade. The Nasdaq Composite Index NQH9, +0.39% was up 10 points, or 0.1%, to 7,045.
What’s driving the market?
Wall Street remains focused on bank performance, and futures markets took a turn for the worse after Morgan Stanley MS, -4.41% announced earnings and revenue that fell short of analyst expectations. Chief Executive Officer James Gorman reassured investors, however, that “We do not believe the fourth quarter is the new normal,” while adding that the bank’s performance in the first quarter of 2019 has already begun to rebound.
The news follows a warning by French bankSociété Générale GLE, -5.66% that its fourth-quarter revenue would fall roughly 20%, due to the challenging environment in global capital markets.
Also weighing on markets was news reported late Wednesday that federal prosecutors have launched a criminal investigation of China’s Huawei Technologies Co. for allegedly stealing trade secrets from American corporations it does business with. The news raised fears that broader tensions between the U.S. and China would prevent a trade deal to avoid the Trump administration’s planned increase in tariffs on a range of imports from 10% to 25%, scheduled for March 1.
Meanwhile, investors were increasingly worried that a government shutdown entering its 27th day would deliver a more lasting impact to economic growth in the first quarter, with no end in sight for the partial closure.
Read: Why investors are starting to pay attention to the government shutdown
Separately, investors awaited the next steps for Britain after Theresa May’s government narrowly survived a no-confidence vote Wednesday as she attempts to forge a path forward for the U.K. exit from the European Union.
What are the strategists saying?
“There are so many earnings reports yet to come, and that’s why you’re not seeing more movement in the markets today,” Tom Martin, senior portfolio manager at Globalt Investments told MarketWatch.
“Markets have also risen to reach a key resistance level,” he added. Only with a much wider sample of company earnings and outlooks will investors decide to break through those levels or retest recent lows, he said.
Investors remained focused on bank earnings this week, and what the numbers and management commentary say about the broader U.S. economy, Tom Essaye, president of the Sevens Report wrote in a Thursday note to clients.
Commentary from banks executives has been “better than feared,” he wrote.
“The numbers themselves are OK, but not great, while the commentary is reassuring, but not overtly optimistic,” Essaye argued. “Given very low expectations [for the financial sector] heading into this earnings season, the better-than-feared result is helping markets rally, but it’s not enough to cause a material move higher in stocks through what we think is the higher end of the current range (2720ish).”
What data and speakers are ahead?
The number of Americans newly applying for unemployment benefits fell in the week ending Jan. 12, to 213,000 from 216,000 the week prior. Economists polled by MarketWatch had expected a reading of 220,000.
The Federal Reserve Bank of Philadelphia’s manufacturing index rose to 17.0 in January, up from 9.1 in December, the bank reported Thursday. The index reflects the health of the manufacturing sector in Pennsylvania, Delaware and New Jersey.
Federal Reserve Gov. Randal Quarles was scheduled to give a speech on insurance regulation and supervision in New York City Thursday morning.
Which stocks are in focus?
Shares of Morgan Stanley fell 5.5% Thursday
Signet Jewelers Ltd. SIG, -21.61% stock was down 22%, after retailer cut guidance for its fourth quarter and fiscal 2019 and said its holiday performance fell short of expectations.
Amazon.com Inc. AMZN, +0.25% shares were in focus after a report from Consumer Intelligence Research Partners Inc. that Amazon prime membership has reached 101 million members. Shares are up 0.1% Thursday.
Shares of PPP Industries, Inc. PPG, +3.62% were up 3.4%, after the company issued a downbeat outlook.
How did the benchmarks fare yesterday?
On Wednesday, the Dow rose 141.57 points, or 0.6%, to 24,207.16, while the S&P 500 index climbed 5.80 points, or 0.2%, to 2,616.10. The Nasdaq Composite Index advanced 10.86 points, 0.2%, to 7,034.69.
How are other markets trading?
Markets in Asia traded lower, with Japan’s Nikkei NIK, -0.20% China’s Shanghai Composite Index SHCOMP, -0.42% and Hong Kong’s Hang Seng HSI, -0.54% all losing ground Wednesday.
In Europe, markets were also in the red, with the Stoxx 600 Europe SXXP, +0.04% shedding 0.4% and the FTSE 100 UKX, -0.40% down 0.7%.
Crude oil CLG9, -0.90% was on the retreat Thursday, down 1.4%, while gold GCG9, -0.22% was down 0.3% and the U.S. dollar DXY, +0.05% was virtually unchanged.
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