Stocks finished lower Thursday, with the Nasdaq snapping an eight-session winning streak, as fresh economic data out of Europe and Japan suggest further slowing in global growth. However, fears about a world-wide slowdown were somewhat tempered by reports that U.S. and Chinese negotiators were beginning to outline a deal to end a long-running trade spat
How did major benchmarks fare?
The Dow Jones Industrial Average DJIA, -0.40% fell 103.81 points, or 0.4%, to 25,850.63 and the S&P 500 SPX, -0.35% shed 9.82 points, or 0.4%, to 2,774.88, while the Nasdaq Composite Index COMP, -0.39% dropped 29.36 points, or 0.4%, to 7,459.71.
What drove the market?
U.S. and Chinese negotiators have started to iron out specific details of a possible trade deal, Reuters reported, citing sources it called familiar with the talks. The report said agreements in principle are being drawn up in six key areas: forced technology transfers and cyber theft, intellectual-property rights, services, currency, agriculture and nontariff barriers to trade.
Negotiators have continued talks in Washington this week, following a round of discussions last week in Beijing. President Donald Trump earlier said that a March 1 deadline isn’t a “magical” date, which investors took as a sign that tariffs on imports of Chinese goods may not automatically rise next month if progress continues toward a deal.
Concerns about slowing global growth were underscored by the release of surveys from Europe and Japan that showed manufacturing contracting in February, with export-dependent German manufacturers reporting the worst drop in activity in more than six years.
U.S. economic data were mixed with durable-goods orders rising 1.2% in December, below the 1.4% expected by economists, according to a MarketWatch poll. Outside of orders for airplanes and automobiles, orders rose just 0.1%. Meanwhile, a key measure of business investment, known as core orders, slipped 0.7% in December.
Manufacturing activity declined in Pennsylvania, Delaware and New Jersey in February, for the first time since May of 2016, according to the Philly Fed manufacturing index. The index fell to a seasonally adjusted reading of -4.1 from 17 in January.
New claims for jobless benefits dropped to a seasonally-adjusted 216,000 during the week ended Feb. 16, below the 229,000 expected by economists polled by MarketWatch.
U.S. private-sector output growth rose in February at a faster rate than January, according to the Markit PMI composite survey of both the manufacturing and services sectors. The index rose to a seasonally adjusted level of 55.8 in February from 54.4 in January.
The Conference Board’s leading-economic-indicators index declined 0.1% in January to 111.3, following no change in December.
Existing home sales fell 1.2% in January to a seasonally adjusted annual rate of 4.94 million homes, the National Association of Realtors. It marks the third straight month of declines.
What were analysts saying?
“Stocks have gained momentum recently because people are thinking that the U.S. and China are going to accomplish something on trade” in the coming weeks and months, said Wayne Wicker, chief investment officer at Vantagepoint Investment Advisors. But such optimism can only take the market so far. Meanwhile, “investors were pushed into reality by the economic reports this morning,” which provide more evidence that the U.S. economy will see materially slower growth this year than last, he added.
“The December durable-goods data suggest that equipment investment growth slowed further in the fourth quarter, and we expect it to remain weak for most of this year,” wrote Andrew Hunter, senior U.S. economist with Capital Economics, in a research note. “Unfortunately, there looks to be little prospect of a rebound in investment growth soon.”
What stocks were in focus?
Tesla Inc. TSLA, -3.74% shares slid 3.7% after Consumer Reports withdrew its recommendation of the Model 3 due to “declining reliability.”
Shares of Dow component Nike Inc. NKE, -1.05% fell 1.1%. The sports apparel and equipment company was in the spotlight after Duke University basketball sensation Zion Williamson was lost to a knee injury seconds into a game against archrival North Carolina, when his foot slid on the floor and his Nike shoe came apart.
Avis Budget Group Inc. CAR, +17.14% shares rallied 17% after the company reported fourth-quarter financial results that showed the car-rental company outpacing expectations.
Shares of Domino’s Pizza Inc. DPZ, -9.15% skidded 9.2% after the global chain reported fourth-quarter earnings, revenue and same-store sales that fell short of Wall Street expectations.
Shares of Albermarle Corp. ALB, +7.79% climbed 7.8% after the lithium producer released better-than-expected quarterly earnings.
How were other markets trading?
Stocks in Asia closed mixed, with Japan’s Nikkei 225 rising 0.2%, while China’s Shanghai Composite Index fell 0.3% and Hong Kong’s Hang Seng Index added 0.4%. In Europe, the Stoxx Europe 600 SXXP, -0.28% edged lower.
Oil prices CLJ9, -0.04% weakened, while the price of gold GCJ9, +0.01% settled lower and the U.S. dollar DXY, +0.01% gained against peers.
