By Chris Matthews and William Watts, MarketWatch
Nike Shares weigh on the Dow
U.S. stocks fell at the start of trade Friday, after a downbeat
round of European data underlined worries about global economic
growth.
What are indexes doing?
The Dow Jones Industrial Average fell 118 points, or 0.5%, to
25,845, while the S&P 500 index was off 11 points, or 0.4%, to
2,843. The Nasdaq Composite declined 29 points, or 0.4%, to
7,811.
What's driving the market?
Global growth concerns were brought to the fore after a round of
March purchasing-managers-index readings pointed to a further
slowdown in activity across the eurozone
(http://www.marketwatch.com/story/europe-manufacturing-pmi-signals-deeper-slowdown-2019-03-22).
Data firm IHS Markit said its composite purchasing managers index
-- a measure of activity in the manufacturing and services sector
-- fell to 51.3 in March from 51.9 in February versus economists'
expectations for a dip to 51.8. A reading above 50 indicates an
increase in activity.
The data indicated a deepening contraction in manufacturing
activity, with the region's manufacturing PMI reading falling to
47.7 -- a 71-month low -- from 49.4 in February.
As European equities came under pressure, investors bought
bonds, pushing the yield on Germany's 10-year government bond,
known as the bund, below 0%
(http://www.marketwatch.com/story/yield-on-10-year-german-government-bond-dips-below-0-after-downbeat-data-2019-03-22).
It changed hands at -0.09% in recent action.
Meanwhile, U.S.-China trade relations remained in the headlines,
after President Trump said on Fox Business Network Friday morning
that "I think we're getting very close" to a trade deal with China.
"That doesn't mean we get there, but I think we're getting very
close."
This comes just days after the president warned markets that
tariffs on Chinese goods may remain "for a substantial period of
time," even after a trade deal is reached, to ensure Chinese
compliance with its terms.
How did the benchmarks fare yesterday?
U.S. stocks had started Thursday's session with a weaker tone,
which analysts attributed in part to growth worries after the
Federal Reserve signaled most policy makers expect no rate rises in
2019 and underlined continued concerns about the economic
picture.
But equities soon erased losses to rally, with technology shares
taking the lead. The Dow advanced 216.84 points, or 0.8%, to end at
25,962.51, for its biggest daily rise since Feb. 15, while the
S&P 500 advanced 30.65 points, or 1.1%, to 2,854.88. The
tech-heavy Nasdaq Composite rose 109.99 points, or 1.4%, to end at
7,838.96. The S&P and Nasdaq each saw their best one-day gains
since March 11.
What are analysts saying?
"A series of worse than expected economic releases from Europe
have sounded the alarm bell, not just for the bloc, but also the
global economy, by providing further evidence of a world-wide
slowdown in economic activity," said David Cheetham, chief market
analyst at XTB, in a note. "These industry surveys are keenly
followed, and unlike employment or GDP figures they are commonly
seen as leading indicators due to the nature of their composition
which is heavily weighted to future expectations."
Which stocks are worth watching?
Shares of Tiffany & Co. (TIF) rose 0.7%, after the luxury
jewelry retailer reported fiscal-fourth quarter profits
(http://www.marketwatch.com/story/tiffanys-stock-drops-after-profit-beat-but-sales-missed-expectations-2019-03-22)
that beat Wall Street expectations, but missed forecasts for
same-store sales growth.
Nike Inc. (NKE) shares fell 3.6%, even after the company
reported fiscal third-quarter profits
(http://www.marketwatch.com/story/nike-stock-falls-after-company-swings-to-quarterly-profit-2019-03-21)
Thursday evening that beat analyst expectations and revenue that
was in line with forecasts. The stock has risen 18.7%
year-to-date.
Shares of Hibbett Sports Inc. (HIBB) rallied 21.1% Thursday
morning, after the sporting-goods store operator reported
same-store sales growth of 3.8%, versus the flat growth expected by
analysts. The firm also issued guidance for the full 2020 fiscal
year that surpassed forecasts.
GameStop Corp. stock rose 0.9%, after the videogame retailer
announced late Thursday
(http://www.marketwatch.com/story/gamestop-names-new-ceo-2019-03-21)
that retail veteran George Sherman would assume the chief executive
officer role at the firm.
What data are in focus?
Following disappointing data from Europe, data firm IHS Markit
will issue its index readings of the U.S. manufacturing and
services sectors at 9:45 a.m. Eastern Time.
At 10 a.m. existing home sales data for February will be issued
by the National Association of Realtors.
At the same time, data on wholesale inventories for the month of
January will be released by the Commerce Department.
At 2 p.m. the Treasury Department will announce the size of the
federal budget deficit for the month of February.
What are other markets doing?
European equity markets remained lower
(http://www.marketwatch.com/story/european-markets-tumble-as-growth-fears-increase-2019-03-22),
with the STOXX 600 Europe index off 0.4% and Germany's DAX off
0.3%.
Asian stock markets closed modestly higher
(http://www.marketwatch.com/story/asian-markets-mixed-as-investors-process-feds-outlook-2019-03-21),
with Japan's Nikkei, Hong Kong's Hang Seng Index and China's
Shanghai Composite Index all edging higher Friday.
In commodities markets, crude oil prices were in retreat, while
the price of rose. The value of the U.S. dollar , meanwhile, edged
higher Friday.
(END) Dow Jones Newswires
March 22, 2019 09:53 ET (13:53 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.