Stock Market News For Jan 15, 2019
Zacks Investment Research | Jan 14, 2019 09:27PM ET
Benchmarks ended in the red on Monday as corporate earnings kicked off. Losses were broad based and the result of weak Chinese trade data. Further, China’s trade surplus with the United States hit record levels. Such events led to investors rotating out of stocks. Further, tech and utilities shares declined steeply and weighed on the broader markets.
The Dow Jones Industrial Average (DJI) decreased 0.4%, to close at 23,909.84. The S&P 500 decreased 0.5% to close at 2,582.61. The tech-laden Nasdaq Composite Index closed at 6,905.92, losing 0.9%. The fear-gauge CBOE Volatility Index (VIX) increased 3.1% to close at 18.76. A total of around 6.8 billion shares were traded on Monday, lower than the last 20-session average of 8.83 billion shares. Decliners outnumbered advancers on the NYSE by a 1.31-to-1 ratio. On Nasdaq, a 1.53-to-1 ratio favored declining issues.
How Did the Benchmarks Perform?
The Dow dropped 86.1 points to end the session in negative territory. The 30-stock index suffered losses after shares of Apple (NASDAQ:AAPL) and Merck & Co. (NYSE:MRK) slid 1.5% and 2%, respectively and weighed on the Dow.
The S&P 500 also ended in the red. The broader index shed 13.7 points, with 10 of its 11 major sectors ending in the negative territory. Steep declines in utilities, tech and healthcare shares weighed on the S&P 500. Shares of Amazon (NASDAQ:AMZN) , Apple, Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) declined 1.4%, 1.5%, 1.4% and 1.2%, respectively and the broader index lower.
Meanwhile, the tech meltdown also led to losses for the Nasdaq. The tech laden index lost 65.6 points to end in negative territory. For the record, Monday marked the first time in 2019 that the three major benchmarks ended in the red for two back-to-back sessions.
China’s Decelerating Trade Growth Remains a Worry
The U.S.- China trade war had negative ramifications on China’s trade growth and global consumer demand last year. Per the latest customs data released on Jan 14, China’s exports surged 7.1% in 2018. This was, however, lower than the increase of 7.9% in 2017. On the other hand, imports growth dipped to 12.9% last year from 15.9% in 2017. Analysts believe that such a scenario will force China to resolve its tariff dispute with the United States faster.
Meanwhile, per the latest official data on Jan 14, China’s trade surplus with the United States hit $323.32 billion in 2018 — the biggest ever such difference between the two countries. China’s exports to the United States increased 11.3% in 2018, vis-à-vis a 0.7% growth in imports from America.
Such developments weighed heavily on the investor’ sentiment as was evident from the manner in which market watchers lost their appetite for risky investments such as stocks. Investors also closely followed the onset of the fourth quarter earnings season.
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Brexit Vote Due on Tuesday
Lawmakers from the United Kingdom are set to vote on prime minister Theresa May’s Brexit deal on Tuesday. U.K. leader of opposition Jeremy Corbyn had stated on Jan 13 that Labor Party might end up pushing for a general election in the event of the parliament rejecting the prime minister’s proposal for Brexit. Such events kept investors on tenterhooks.
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