By Sue Chang and Anora Mahmudova, MarketWatch
Wal-Mart Stores gains as it plans 10,000 new jobs this year
U.S. stocks retreated on Tuesday as investors remained cautious
in the wake of President-elect Donald Trump's charge that a strong
dollar is hurting the economy.
The Dow Jones Industrial Average slid 58.96 points, or 0.3%, to
close at 19,826.77. The S&P 500 index declined 6.75 points, or
0.3%, to end at 2,267.89, with financials and health-care stocks
leading the losses. U.S. markets were closed on Monday for Martin
Luther King Jr. Day holiday.
"There is a lot going on this week, making investors slightly
cautious. For example, the Davos meeting is where a confrontation
between globalization and populism is on full display," said Jack
Ablin, chief investment officer at BMO Private Bank, referring to
the World Economic Forum's annual meeting in the Swiss Alps.
Read:Don't worry, Xi tells Davos: China will protect
globalization
(http://www.marketwatch.com/story/dont-worry-xi-tells-davos-china-will-protect-globalization-2017-01-17)
The Nasdaq Composite Index shed 35.39 points, or 0.6%, to finish
at 5,538.73. Biotechnology stocks were hit hardest, with the
iShares Nasdaq Biotechnology ETF (IBB) down 2%.
Trump's comments on the dollar over the weekend sent the
currency sharply lower. He told The Wall Street Journal in an
interview that published Friday the U.S. currency was "too strong"
because China was keeping its own yuan weaker. "Our companies can't
compete with them now because our currency is too strong, and it's
killing us," the president-elect said in the interview
(http://www.wsj.com/articles/trump-warns-on-house-republican-tax-plan-1484613766).
The dollar, which appreciated about 5% in the fourth quarter of
2016, has been drifting sideways since the start of the year. A
reversal in bond yields also points to worries among investors. The
10-year Treasury prices have been rising over the past few weeks,
with the yield dropping to 2.3%, its lowest level in seven
weeks.
See:Trump sends shivers through stock market on 'too strong'
dollar comments
(http://www.marketwatch.com/story/trump-comments-on-too-strong-dollar-send-shivers-through-stock-market-2017-01-17)
Investors are taking Trump's comments as a sign that he may not
be as open to a series of interest rate increases and a stronger
dollar as had been initially projected, said Colin Cieszynski,
chief market strategist at CMC Markets.
Political news appeared to distract investors from earnings
releases.
"While we think earnings will live up to expectations, the
markets may focus rather on the first hundred days of the new
presidency, which could lead to volatility ahead," wrote Peter
Cardillo, chief market economist at First Standard Financial.
Paul Nolte, portfolio manager at Kingsview Asset Management,
said the markets are still seeking clarity on the new
administration's agenda, beyond "a tweet or two from Trump on
policies and economic plans."
Geopolitics also resulted in early gyrations in equities after
U.K. Prime Minister Theresa May in a speech indicated Britain will
press for a firm exit from the European Union. The pound surged
(http://www.marketwatch.com/story/pound-rallies-as-may-vows-to-put-final-brexit-deal-to-parliamentary-vote-2017-01-17),
trading at $1.2398 on Tuesday, after May said she'll put the terms
of the country's exits from the EU to a parliamentary vote.
"Much of the action today is global in nature," said Nolte.
The Japanese yen , attractive to investors at times of global
uncertainty, rose to Yen112.64 against the dollar
(http://www.marketwatch.com/story/dollar-broadly-lower-pound-steadies-ahead-of-uk-pms-brexit-speech-2017-01-17),
from Yen114.17 late Monday in North America.
Read:Stocks may need a flawless earnings season to keep Trump
rally going
(http://www.marketwatch.com/story/stocks-need-earnings-to-be-flawless-to-keep-trump-rally-going-2017-01-14)
Another perceived haven asset, gold , shot up more than 1%
(http://www.marketwatch.com/story/nervousness-over-brexit-trump-drive-gold-to-fresh-8-week-highs-2017-01-17)
to settle above $1,200 an ounce. Oil prices were higher thanks to a
weak dollar.
Economic docket: Away from politics, the Empire State index for
January slipped to 6.5, from a revised 7.6 in December, which was
an 8-month high. Any reading above zero indicates improving
conditions.
Meanwhile, New York Federal Reserve President William Dudley
played down the role of inflation in monetary policy decisions.
Dudley said inflation is "simply not a problem" and that a strong
dollar would limit corporations' ability to raise prices.
Stocks to Watch:UnitedHealth(UNH) shares slumped 1.4% even as
its profit and revenue beat forecasts.
(http://www.marketwatch.com/story/unitedhealths-revenue-profit-tops-forecasts-2017-01-17-6485382)
(http://www.marketwatch.com/story/unitedhealths-revenue-profit-tops-forecasts-2017-01-17-6485382)See:Stocks
may need a flawless earnings season to keep the Trump rally going
(http://www.marketwatch.com/story/stocks-need-earnings-to-be-flawless-to-keep-trump-rally-going-2017-01-14).
Shares of Clayton Williams Energy Inc.(CWEI) shot up 40% after
oil producer Noble Energy Inc.(NBL) said it would pay $2.7 billion
to buy its smaller rival
(http://www.marketwatch.com/story/noble-energy-in-27-billion-deal-for-clayton-williams-2017-01-17).
Noble Energy shares surged 7.1%.
British America Tobacco PLC(BATS.LN) said it would pay $49.4
billion
(http://www.marketwatch.com/story/bat-to-pay-49-bln-for-full-control-of-reynolds-2017-01-17)
for the 57.8% of Reynolds American Inc.(RAI) that it doesn't own.
Shares of Reynolds rose 3.1%.
Tiffany & Co. (TIF) shares dropped 2.5% after holiday sales
results disappointed investors.
Wal-Mart Stores Inc.(WMT) said it plans to create about 10,000
U.S. jobs this year
(http://www.marketwatch.com/story/wal-mart-to-create-10000-us-jobs-in-nod-to-trump-2017-01-17-61035011).
(http://www.marketwatch.com/story/wal-mart-to-create-10000-us-jobs-in-nod-to-trump-2017-01-17-61035011)
Wal-Mart shares rose 1.9%.
Other markets: The FTSE 100 index slid as investors grappled
with the likelihood of a hard Brexit
(http://www.marketwatch.com/story/ftse-100-slips-as-may-signals-britain-will-leave-eus-single-market-2017-01-17),
while stocks across the rest of Europe also weakened. In Asia , the
Nikkei 225 index fell 1.5%, weighed by global political jitters and
a strong yen that pressured shares of exporters.
--Barbara Kollmeyer contributed to this article.
(END) Dow Jones Newswires
January 17, 2017 16:18 ET (21:18 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Apr 2024 to May 2024
FTSE 100
Index Chart
From May 2023 to May 2024