U.S. Stocks Waver as Investors Weigh Company Earnings

(AP) -
stocks, markets, wall street

Stocks wavered between small gains and losses on Wall Street Thursday as an early rally lost some momentum.

Technology and industrial companies and retailers notched gains, while communications, energy and utilities stocks headed lower.

U.S. stocks are on track to finish the first quarter with solid gains, though investors remain anxious about the slowing global economy and worrisome signals coming from the bond market.

After falling sharply since Friday, the yield on the benchmark 10-year Treasury note rose Thursday to 2.39 percent from 2.37 percent late Wednesday. That remained below the yield on the three-month Treasury bill, an unusual phenomenon that has preceded recessions in the past.

“The markets are looking closely at bond yields, and the fact that bond yields have eased a little bit is a reason for the stock market to breathe a little easier today,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank.

Traders also welcomed solid quarterly results from several companies, including watch maker Movado Group, Calvin Klein parent company PVH, yoga wear retailer Lululemon Athletica and consulting company Accenture.

Verizon led the slide in communications services stocks, shedding 3.6 percent.

Energy companies also fell as oil prices declined. President Donald Trump tweeted that it is “very important that OPEC increase the flow of Oil,” adding that world markets are fragile and the price of oil is getting “too high.” Shares in Marathon Petroleum fell 2 percent.

Investors also weighed new data showing the U.S. economy grew at a lower-than-expected rate in the fourth quarter.

Traders had their eye on several potential market-moving developments. The Chinese and U.S. trade negotiators were preparing for the latest round of talks aimed at ending a tariff war between the world’s two biggest economies. And in the United Kingdom, the countdown to Britain’s departure from the EU loomed Friday.

In addition, investors were looking ahead to the next corporate earnings season, which kicks into gear in mid-April.

KEEPING SCORE: The Dow Jones Industrial Average rose 17 points, or 0.1 percent, to 25,643 as of 12:53 p.m. Eastern Time. The S&P 500 gained 0.1 percent and the Nasdaq added 0.2 percent. The Russell 2000 index of smaller company stocks picked up 0.1 percent.

Major indexes in Europe were mixed.

SLOWING ECONOMY: The Commerce Department said U.S. economic growth slowed sharply in the last three months of 2018 to an annual rate of just 2.2 percent, reflecting weakness in consumer spending, business investment, government spending and housing. Economists believe growth has slowed further in the current January-March quarter due to weaker growth prospects in China and Europe, the dampening effects on U.S. exports from the Trump administration’s trade battles and the waning boost from the 2017 tax cut and government spending.

The more downbeat outlook for economic growth has prompted the Federal Reserve to signal that it plans to keep its benchmark interest rate on hold this year.

TRADE TALKS: U.S. trade negotiators arrived in Beijing on Thursday for a new round of talks aimed at ending a tariff war over China’s technology ambitions. Chinese and U.S. officials have suggested that progress has been made toward resolving the conflict, which has disrupted trade in everything from soybeans to medical equipment.

The talks were to begin with a working dinner Thursday and last the entire day Friday. Chinese officials are expected to return to the U.S. in early April.

RIGHT ON TIME: Movado jumped 18.4 percent after the watch maker reported strong earnings in its last quarter.

A GOOD LOOK: Shares in PVH vaulted 15.1 percent after the parent company of Calvin Klein and other brands turned in solid quarterly results.

NOT A STRETCH: Lululemon Athletica climbed 15.6 percent after the athletic apparel retailer posted better-than-expected quarterly results and issued a positive outlook.

SOLID QUARTER: Accenture was the biggest gainer in the technology sector after the consulting company’s latest quarterly results topped Wall Street’s forecasts. The stock was up 4.9 percent.

ENERGY: Benchmark U.S. crude fell 0.9 percent to $58.88 a barrel. Brent crude, used to price international oils, gave up 0.9 percent to $66.61 a barrel.

CURRENCIES: The dollar rose to 110.65 yen from 110.36 yen on Wednesday. The euro weakened to $1.1221 from $1.1263. The British pound fell to $1.3052 from $1.3262.