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)

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