US stocks finished slightly lower heading into the weekend with investors cautious going into the weekend due to the possible launch of missile strikes against Syrian government assets. By the closing bell, the Dow Jones Industrials Average was down by 0.50% or 122.91 points at 24,360.14, with the S&P 500 off by 0.29% or 7.69 points at 2.656.30 and the Nasdaq Composite down by 0.47% or 33.60 points to 7,106.65. In parallel, the yield on the benchmark 10-year US Treasury note was one basis point lower at 2.83%. Significantly, banks fared poorly despite what appeared to be better-than-expected results from heavyweights JP Morgan and Citigroup. Thus, from a sector standpoint the weakest areas of the market were: Banks (-2.44%), Electronic Office Equipment (-1.56%) and Apparel retailers (-1.50%). Heading the other way, Gold Mining rose 2.64%. Geopolitics remained in focus after UK Prime Minister Theresa May and US President Trump agreed during a late-night phone conversation that Syria’s suspected use of chemical weapons should not go unchallenged. Downing Street said Cabinet ministers had agreed "on the need to take action" to "deter further use of chemical weapons" after concluding that it was "highly likely" the Assad regime was behind the chemical attack. Helping to offset worries about the situation in Syria was the latest tweet from Trump about the Trans-Pacific Partnership. "Would only join TPP if the deal were substantially better than the deal offered to Pres. Obama. We already have bilateral deals with six of the eleven nations in TPP, and are working to make a deal with the biggest of those nations, Japan, who has hit us hard on trade for years!," the US President said. Investors were also digesting the latest data out from China earlier, which showed a surprise monthly trade deficit for the month of March, although analysts were quick to brush off its significance, pointing to the impact of seasonal effects around the Lunar New Year holidays. China's trade balance swung to a deficit of $4.98bn from a surplus of $33.7bn the month before, versus expectations for a surplus of $19.6bn. In corporate news, JPMorgan shares lost 1.77% after it said first-quarter profit rose 35% on the same period a year ago, partly thanks to lower taxes. Citigroup shares fell 2.08% after posting rapidly expanding profits from its global consumer bank and a strong performance from its equities division that beat market expectations and Wells Fargo was down 2.87% after the bank emphasized that its results, which topped earnings forecasts, could be revised depending on the outcome of talks with regulators over a possible $1bn settlement. Some analysts also pointed out how Well's Fargo's net interest income had fallen short of their forecasts. Elsewhere, real estate listings company Zillow Group plunged 6.53% after saying late on Thursday that it will get into the business of buying and flipping homes. SeaWorld Entertainment gained 2.99% after reporting losses late on Thursday. On the data front, the Michigan consumer sentiment index fell to 97.8 from 101.4, below the consensus, 100.4. "The consensus always looked optimistic, given the sensitivity of the index to the stock market. Both current conditions and expectations fell, by 6.2 points and 2.0 points respectively," said Ian Shepherdson, Pantheon Macroeconomics' chief economist. |
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