Dow Falls 118.79 Points, Weighed Down by IBM, Chevron -- WSJ
April 20 2017 - 2:02AM
Dow Jones News
By Riva Gold and Aaron Kuriloff
Falling energy shares and mixed corporate earnings pressured
U.S. stocks on Wednesday.
Some investors and analysts are hoping earnings growth will
support what they say are elevated stock prices, after signs of
economic expansion and expectations for corporate-friendly policies
from the Trump administration helped drive major indexes to
records.
Cooling economic data and concerns about the administration's
ability to enact tax cuts and regulatory rollbacks have weighed on
major U.S. indexes in recent weeks, along with worries about rising
geopolitical tensions.
The Dow industrials lost 118.79 points, or 0.6%, to 20404.49 on
Wednesday. The S&P 500 slipped 4.02 points, or 0.2%, to
2338.17, and the Nasdaq Composite gained 13.56 points, or 0.2%, to
5863.03.
Investors' allocation to U.S. stocks fell to its lowest levels
since January 2008, according to an April survey of global fund
managers by Bank of America Merrill Lynch, with 83% of investors,
the highest ever, saying U.S. stocks are overvalued. Allocation to
eurozone equities climbed to a 15-month high in April amid
decreasing fears about the impact of European elections.
"Investors are expecting another strong earnings season," said
Nandini Ramakrishnan, strategist at J.P. Morgan Asset Management.
"It would be disappointing if earnings-per-share numbers didn't
come out [well]...given the exuberance of markets in the past five
or six months."
International Business Machines shaved 57 points off the Dow
industrials, falling $8.36, or 4.9%, to $161.69, after the
technology giant on Tuesday reported that revenue fell from the
year-earlier period for the 20th consecutive quarter. It was the
stock's biggest one-day percentage decline since June.
Morgan Stanley climbed 83 cents, or 2%, to 42.04, after the bank
said its quarterly earnings rose 70%. A day earlier, Goldman Sachs
Group missed analysts' estimates after a decline in trading
revenue. Its shares fell 1.50, or 0.7%, to 214.09 on Wednesday.
Yahoo shares were choppy during the session and closed down 56
cents, or 1.2%, at 47, after the company Tuesday released results
above expectations and reaffirmed it expects to close its deal with
Verizon by the end of June.
Declines in energy stocks also dragged on the Dow industrials,
with Chevron falling 1.45, or 1.4%, to 104.23, and Exxon Mobil
losing 56 cents, or 0.7%, to 80.49.
The price of U.S. crude oil slid 3.8% to $50.44 a barrel -- its
largest decline in more than a month -- after the U.S. Energy
Information Administration said weekly gasoline supplies rose for
the first time since February. Energy shares were among the biggest
decliners in the S&P 500, losing 1.4%.
Assets that investors consider relatively safe retreated after
strengthening on Tuesday. Gold for April delivery fell 0.8% to
$1,281.40 a troy ounce after climbing for five straight sessions,
while the yield on the 10-year Treasury note rose to 2.202% from
2.177% in the previous session. Yields rise as prices fall.
The WSJ Dollar Index rose 0.4%, a day after its biggest daily
drop in a month.
The Stoxx Europe 600 inched up 0.2%, recovering from its worst
session since September. Bank shares led gains as data Wednesday
showed the eurozone's trade balance returned to surplus in
February, adding to hopes for a modest pickup in growth in the
first quarter.
The Nikkei Stock Average edged up less than 0.1% Wednesday. The
Shanghai Composite Index fell 0.8% to its lowest since February,
while Hong Kong's Hang Seng Index shed 0.4%. Australia's
S&P/ASX 200 fell 0.6%.
Write to Riva Gold at riva.gold@wsj.com and Aaron Kuriloff at
aaron.kuriloff@wsj.com
(END) Dow Jones Newswires
April 20, 2017 02:47 ET (06:47 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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