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US-STOCKS-MARKETS
US stocks fall modestly on housing data, mixed earnings
NEW YORK, Oct 18, 2018 (BSS/AFP) – Wall Street stocks finished modestly
lower on Wednesday amid lingering worries over higher US interest rates
following mixed earnings and lackluster housing data.
The Dow Jones Industrial Average lost the most of the major indices,
falling 0.4 percent to 25,706.68, weighed down by a big drop in IBM shares.
That was still more than 200 points above the session low.
The broad-based S&P 500 and tech-rich Nasdaq Composite Index both lost
less than 0.1 percent, with the former at 2,809.21 and the latter at
7,642.70.
US stocks have been pressured much of October as US Treasury yields have
lurched higher. Wall Street suffered a bruising two-day rout last week that
was partly recovered in a strong session on Tuesday.
“Earnings seem to be more good than bad,” said Art Hogan, chief market
strategist at B. Riley FBR, who was encouraged that the markets held on to
most of their gains from Tuesday.
But Brian Battle, director at the Performance Trust Capital Partners, said
markets would need to reprice stocks now that central banks were exiting a
period of extraordinary low interest rates and monetary stimulus.
Minutes from the Federal Reserve’s meeting last month confirmed that most
policy makers expect more gradual interest rate hikes.
“As this policy begins to reverse, it is going to be destabilizing,”
Battle said. “There will be days where we sell off 500 and then recover 500,
then sell off 250 and recover 250.”
Dow member IBM sank 7.6 percent after the technology giant reported a drop
of two percent in third-quarter revenues to $18.8 billion, below analyst
expectations.
But other companies had strong results, including Netflix, which surged
5.3 percent after reporting that quarterly profit more than tripled to $403
million and United Continental, which gained 6.0 percent after profits rose
almost 30 percent to $836 million.
Home improvement retailers Home Depot and Lowe’s tumbled 4.4 percent and
3.3 percent respectively after Credit Suisse downgraded both companies,
writing that moderating housing prices due to higher interest rates would
pinch demand at the retailers.
BSS/AFP/HR/0942