By Chris Matthews and William Watts, MarketWatch
Apple rolls out new iPhones, iPad and Watch
U.S. stocks traded flat-to-lower Tuesday, as a selloff in
momentum-driven technology shares competed with a rally in energy
and industrials stocks to set the tone on Wall Street, and as
investors looked ahead to central-bank policy meetings and gauge
developments on the U.S.-China trade front.
Apple Inc. was in the spotlight as it announced new model
iPhones and other products at its annual launch event Tuesday
afternoon.
How are the major benchmarks faring?
The Dow Jones Industrial Average fell 6 points, or less than
0.1%, to 26,829, while the S&P 500 index lost 7 points, or
0.2%, to 2,972. The Nasdaq Composite index retreated 23 points, or
0.3%, to 8,064.
Stocks ended mostly lower in lackluster trade Monday, with the
S&P 500 giving up just 0.28 point to end at 2,978.43, ending a
three-day win streak. The Dow , however, ended with a gain of 38.05
points, or 0.1%, at 26,835.51, to extend its winning streak to four
session. The Nasdaq Composite gave up 15.64 points, or 0.2%, to
close at 8,087.44.
Stocks have been in rebound mode in September, however, after
suffering their second losing month of 2019 in August. The S&P
500 is up 1.1% so far this month, while the Dow has gained 1.3% and
he Nasdaq is up 0.7%.
What's driving the market?
Investors were eyeing a potential rotation in market leadership
from defensive names and fast-growing tech stocks into cyclical
sectors, including energy, industrials and materials, all of which
have posted gains Tuesday, in contrast with the S&P 500.
"The big story is the continuing rotation that we saw begin a
couple days ago," Willie Delwhich, market strategist with R.W.
Baird told MarketWatch. "If we can actually move away from narrow,
defensive leadership into cyclical and small-cap leadership, that
would be a healthy development for the market."
Defensive sectors, including real estate, utilities and consumer
staples have all helped drag the major indexes lower Tuesday while
small capitalization stocks, as measured by the Russell 2000 ,
posted gains. The share of stocks advancing on Tuesday was at a
better than 3 to 2 ratio, a potentially bullish signal going
forward, Delwhich said.
Read more: Energy, financial stocks soar: Oversold bounce or the
beginning of a break out?
(http://www.marketwatch.com/story/energy-financial-stocks-soar-oversold-bounce-or-the-beginning-of-a-break-out-2019-09-10)
But Information technology shares were under pressure Tuesday,
down 1.1%, one day after the attorneys general of 50 U.S. states
announced an investigation into Google's 'potential monopolistic
behavior'
(http://www.marketwatch.com/story/google-to-be-investigated-for-possible-antitrust-violations-2019-09-09)
on Monday, underscoring regulatory concerns surrounding large tech
firms.
Shares of Facebook Inc. (FB), Amazon.com Inc. (AMZN), Netflix
Inc. (NFLX) and Google parent Alphabet Inc. (GOOGL) (GOOGL) all
lost ground Tuesday amid a broader sell off momentum-driven growth
stocks, as indicated by the 1.3% decline in the iShares Edge MSCI
USA Momentum Factor exchange-traded fund (MTUM) .
"The risk is that we get half-way through this rotation, stall
out and are left with no momentum anywhere," Delwhich said.
Meanwhile, concerns about the U.S.-China trade battle appear to
have moved to the back burner for investors after being blamed for
volatile market action in August.
China has reportedly offered to buy more American agricultural
products in exchange for a delay in upcoming tariffs and the easing
of a ban against doing business with Chinese telecommunications
giant Huawei Technologies, according to the South China Morning
Post
(https://www.scmp.com/news/china/diplomacy/article/3026585/countdown-trade-war-talks-china-ready-sweeten-deal-buying).
The report comes on the heels of comments by U.S. Treasury
Secretary Steven Mnuchin, who told Fox Business Network Monday that
he views renewed discussions with Beijing as a sign of good
faith.
"The U.S. and China are due to meet next month, and according to
Steven Mnuchin...the U.S. is prepared to do a deal, as long as it
is good for the U.S.," said David Madden, market analyst at CMC
Markets UK, in a note. "The lack of hostilities between the U.S.
and China is likely to keep stocks in their upward move.
The European Central Bank is expected to deliver additional
monetary stimulus when its policy makers meet Thursday, though some
officials have appeared to push back
(https://www.wsj.com/articles/mario-draghis-plan-for-final-jolt-of-stimulus-runs-into-opposition-11568107800?mod=hp_lead_pos3)
against expectations for an aggressive package of measures
combining further interest-rate cuts with a new bond-buying
program.
Read: The ECB's challenge: Pushing rates further into negative
territory without wrecking eurozone banks
(http://www.marketwatch.com/story/the-ecbs-challenge-pushing-rates-further-into-negative-territory-without-wrecking-eurozone-banks-2019-09-10)
The U.S. National Federation of Independent Business on Tuesday
said its small-business optimism index fell 1.6 points to a
seasonally adjusted 103.1 in August
(http://www.marketwatch.com/story/nfib-small-business-optimism-index-falls-in-august-to-a-five-month-low-2019-09-10),
its worst showing since March.
The rate at which Americans quit their jobs hit an all-time high
in July, the Labor Department estimated
(http://www.marketwatch.com/story/job-openings-dip-in-july-as-demand-for-workers-slows-but-high-quit-rate-shows-labor-market-still-strong-2019-09-10)
Tuesday, suggesting that workers are confident in the strength of
the job market. Job openings fell slightly during the month, while
layoffs remained at low levels.
Which stocks are in focus?
Investors are watching shares of Apple(AAPL) as it holds an
annual fall event to roll out new devices and offer more
information about other elements of its business, including its
fast-growing services segment. Apple is expected to introduce three
upgraded iPhone models, as well as new price points, and launch
timing for new gaming and video subscriptions it showed off in a
spring event. Shares rose 0.1% Tuesday.
Netflix (NFLX) stocks fell more than 2% after Apple announced a
TV service for $4.99 a month.
See:Apple iPhone launch event -- 5 things to watch for
(http://www.marketwatch.com/story/apple-iphone-launch-event-5-things-to-watch-for-2019-09-06)
Shares of Ford Motor Co.(F) were down 2.7% Tuesday. Credit
rating agency Moody's Investors Service late Monday downgraded the
auto maker's debt rating
(http://www.marketwatch.com/story/fords-debt-rating-gets-downgraded-to-junk-by-moodys-2019-09-09)
to Ba1, the first rung of "junk," or non-investment speculative
grade, from Baa3, citing "considerable operating and market
challenges" and predicted "weak earnings and cash generation likely
as the company pursues a lengthy and costly restructuring plan."
S&P Global Ratings and Fitch Ratings have a BBB rating on Ford,
which is two steps above junk, though have a negative outlook. As
long as the company has two ratings above junk, it is eligible to
stay in the biggest investment-grade bond indexes.
Shares of HD Supply Holdings Inc.(HDS) were down 6.3% after the
industrial distribution company reported a fiscal second-quarter
profit that topped expectations but sales that missed
(http://www.marketwatch.com/story/hd-supplys-stock-set-to-fall-after-profit-beat-but-sales-outlook-disappoint-2019-09-10),
while also providing a downbeat outlook for the current
quarter.
Shares in fast food retailer Wendy's Co. (WEN) fell 10.1% after
announcing a $20 million plan to serve breakfast nationwide
(http://www.marketwatch.com/story/wendys-jumping-back-into-breakfast-armed-with-bacon-strength-2019-09-10)
from 2020.
How are other markets trading?
The yield on the 10-year U.S. Treasury note rose to 1.69%.
Stocks traded mixed in Asia overnight, with the China CSI 300
falling 0.3%, Hong Kong's Hang Seng index nearly unchanged and
Japan's Nikkei 225 rising 0.4%. In Europe, closed mostly higher,
with the Stoxx Europe advancing 0.1%
In commodities markets, the price of crude oil was down 0.4% to
$57.65 ahead of fresh OPEC forecasts
(http://www.marketwatch.com/story/oil-aims-for-5-day-win-streak-on-optimism-over-production-curbs-2019-09-10)
and a meeting on production cuts later this week.
The price of gold fell 0.7% to about $1,501 an ounce. The U.S.
dollar , meanwhile, edged higher against a basket of its peers.
(END) Dow Jones Newswires
September 10, 2019 14:08 ET (18:08 GMT)
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