Here Are 4 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average fell sharply Friday after retail sales and industrial output in China missed expectations in November.
- Johnson & Johnson (JNJ - Get Report) fell 10.1% Friday following a report that said the company knew for decades that its iconic baby powder sometimes contained asbestos and failed to alert authorities.
- Starbucks Corp. (SBUX - Get Report) slumped 2.35% after the coffee chain unveiled an aggressive expansion strategy in China that could be at risk from slowing consumer sales in the world's second-largest economy.
- Adobe Inc.'s (ADBE - Get Report) fiscal fourth-quarter earnings missed analysts' estimates by 1 cent and the stock fell 7.29%.
Wall Street Overview
Stocks tumbled on Friday, Dec. 14, and global shares slumped after economic data in China, the world's second-largest economy, were weaker than expected.
All three major indices closed Friday's session in correction territory following the rout.
Retail sales in China during November rose 8.1%, the weakest pace since 2003, and were down from 8.6% the previous month. Industrial output rose 5.4% compared with a 5.9% increase in October. Industrial output rose the least in nearly three years as domestic demand in China softened, according to Reuters.
Optimism had been rising amid signs of progress in the trade relationship between the U.S. and China, lifting investor sentiment. But the data "certainly puts a further dent in recent optimism over the outlook for China," wrote analysts at MUFG in a note Friday.
The Dow Jones Industrial Average fell 497 points, or 2.02%, to 24,073, the S&P 500 fell 1.9%, and the Nasdaq tumbled 2.26%. The S&P fell to 2,600, a key point of support for the wide-ranging index.
Stocks in Shanghai closed down 1.53% on Friday, Hong Kong shares declined 1.62%, and Japanese stocks slid more than 2%.
However, China said Friday it would suspend additional 25% tariffs on U.S.-made cars and auto parts for three months starting Jan. 1, 2019, as part of the trade war truce with the United States. Tesla Inc. (TSLA - Get Report) was down 2.94% after the electric vehicle company said it would cut prices on Model S and Model X vehicles in China.
Retail sales for November rose 0.2%, matching economists' estimates. The core reading. which removes gas and auto sales, rose 0.5%.
Johnson & Johnson (JNJ - Get Report) fell 10.1% Friday following a report that said the company knew for decades that its iconic baby powder sometimes contained asbestos and failed to alert authorities.
Reuters reported Friday that Johnson & Johnson knew both its raw talc and finished powder tested positive for traces of asbestos, a carcinogen, citing documents linked to a court case that saw a jury in Missouri award $4.7 billion to 22 women who said the products contained asbestos and caused them to develop ovarian cancer. Reuters also said the company tried, unsuccessfully, to influence plans by U.S. regulators to reduce the amount of asbestos that could legally remain in some cosmetic talc products.
Starbucks Corp. (SBUX - Get Report) was down 2.35% after the coffee chain unveiled an aggressive expansion strategy in China that could be at risk from slowing consumer sales in the world's second-largest economy and guided investors to modestly long-term earnings growth.
Starbucks said it expects long-term earnings growth of around 10%, down from a previous forecast of about 12% and said same-store sales expansion will likely grow at a 3% to 3.4% rate even after a newly unveiled partnership with Uber Eats. Starbucks also said it plans to expand its store footprint in the world's second-largest economy by 6,000 stores over the next four years, nearly double its current total, and will open a so-called "virtual" store that utilizes both its own app and those of online e-commerce giant Alibaba Group Holding Ltd. (BABA - Get Report) , a tie-up CEO Kevin Johnson once described as "rocket fuel" for the company's growth strategy.
Adobe said adjusted earnings for the three months ended Nov. 30, were $1.87 a share, up 45% from the same period last year but just shy of the Wall Street consensus of $1.88. Sales in the quarter were $2.46 billion, up 23% from a year earlier and ahead of analysts' forecasts.
Adobe also said its sees non-GAAP earnings for its 2019 fiscal year at around $7.75 a share and revenue of $11.15 billion, which includes its acquisition of Marketo.
"Adobe achieved record revenue of greater than $9 billion and delivered outstanding earnings performance in fiscal 2018," said CEO Shantanu Narayen. "In 2018 we made significant investments across our product portfolio, entered new markets, and made strategic acquisitions which we believe will fuel continued top and bottom-line performance."
Costco Wholesale Corp. (COST) declined 8.59% after the retailer posted fiscal first-quarter adjusted earnings of $1.61 a share, missing analysts' forecasts of $1.62, and revenue of $35.07 billion that came in below expectations of $37.57 billion. Same-store sales in the quarter rose 8.8%.
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