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Stock Market News: 18 October 2019

U.S. shares fell on Friday as investors considered the company's mixed profits and new announcements of slow growth in the Chinese economy.

The yield on finances declines across the curve amid statements by three Federal Reserve officials on Friday in their final public remarks before officials enter a quiet period before a central bank meeting on October 29-30. During a speech in Boston, Fed Vice President Richard Clarida reiterated that monetary policy is not "pre-set" and that employees will review economic prospects when making their course decisions. He described the US economy as "in a good place" on Friday.

Here are the key movements during the 15:15 session ET:

  • S&P 500 (^ GSPC): -0.1

    3% or 4.02 points

  • Dow (^ DJI): -0.64%, or 171.82 points

  • Nasdaq (^ IXIC): -0.52%, or 42.58 points

  • 10-year Treasury yield (^ TNX): -0.7 bps to 1.748%

  • Gold (GC = F): -0.22% to $ 1495.00 an ounce

Shares of Boeing (BA), a Dow component, slid about 6% during afternoon trading after a Reuters report suggested that the aircraft manufacturer had misled the Federal Aviation Administration on safety at 737 Max. The report cites instant messages from 2016 employees received by Reuters.

The Dow fell nearly 200 points amid a slump in Boeing shares, complicated by a slide in Johnson & Johnson (JNJ) shares after several bottles of its baby powder were found to contain small amounts of asbestos.

Meanwhile, another component of Dow Coca-Cola (KO) reported stronger-than-expected sales for its fiscal third quarter, sending shares higher, even when comparable earnings per share did not meet expectations. According to analysts, the closely watched organic beverage giant revenue, which eliminates currency effects variables, rose 5% to 4.1%, the analysts' expected profit. Coca-Cola has highlighted the double-digit growth in Coca-Cola Zero Sugar volume as a major contributor to performance, reflecting the company's recent change to meet consumer demands for less sugary, healthier beverages.

Coca-Cola updated its year-round guidance to see at least a 5% increase in organic revenues for the entire fiscal year, leaving the door open for growth beyond the proper 5% increase expected earlier. The company reiterated its guidance on year-over-year earnings per share (EPS) to decrease or increase by 1% from $ 2.08 in comparable EPS released last year.

Overseas, another corporation's earnings were mixed. Swedish carmaker Volvo (VOLV-B.ST) reported a 45% drop in third-quarter orders for heavy goods vehicles and said it expects those declines to continue into next year.

"Over the past few years, customers in Europe and North America have renewed and expanded their truck fleet, but with cargo volumes they have leveled off and with current uncertainty about future economic development they are holding back investment," Volvo says in its earnings report.

  Traders Work on the Floor of the New York Stock Exchange (NYSE) in New York, USA, October 3, 2019. Reuters / Brandon McDermid
Traders Work On The Floor New York Stock Exchange (NYSE) in New York, USA, October 3, 2019. REUTERS / Brendan McDermid

Despite proposals to weaken the demand for their vehicles, Volvo Shares turned its initial losses and rose on the Stockholm Stock Exchange. investors considered the stronger-than-expected adjusted operating profit and margin for the quarter, and a later comment by Chief Executive Officer Martin Lundsted outlining a roadmap for dynamic time demand.

The French auto group Renault also highlighted a slowdown in the global automotive industry with grim pre-earnings announcement, sending its shares lower by more than 12% to Euronext Paris.

Renault revises its group revenue below to see a decline of 3-4% per year from previous guidance for a small change from 2018. In addition, Renault reduced its operating margin to 5% from 6%, observed earlier. The carmaker cited "an economic environment that is less favorable than expected and in an increasingly costly regulatory context."

China's growth declines to near 30-year low

Growth in second largest economy the world was even more anemic than expected in the third quarter, as trade tensions and prolonged investment slowdowns outpace Beijing's latest stimulus measures.

China's gross domestic product grew only 6% in the three months ending September, the slowest rate since 1992. is lower than the consensus growth expectations of 6.1%.

However, other areas of the Chinese economy show signs of growth in September. Industrial production rose 5.8% in September from last year, better than the consensus of 4.9%. And retail sales rose 8.2% year-on-year to September by the end of the country, exceeding expectations by 10 basis points.

Meanwhile, in the US, the leading index of the conference, an indicator of the health of the domestic economy, fell for the second consecutive month in September. This index fell 0.1% after a revised decline of 0.2% in August. This is below the consensus expectations for even reporting for the month, according to Bloomberg data.

"LEI in the United States [Leading Economic Index] dropped in September due to weaknesses in the manufacturing sector and interest rates, which were partially offset by rising stock prices and a positive contribution from the leading credit index," said Ataman Ozyildirim, senior director of economic research at The Conference Board. "LEI reflects uncertainty in the prospects and declining business expectations caused by the downturn in the industrial sector and trade disputes."

"In perspective, the LEI is in line with an economy that is still growing, albeit at a slower pace, by the end of year and into 2020, "Osildirim added.

Emily McCormick is a Yahoo Finance reporter. Follow her on Twitter: @emily_mcck

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