Stocks Finish Down as Wall Street Questions Trade Agreement

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished lower Monday afternoon after Chinese officials said they want to talk further about last week's tentative trade agreement between the world's two largest economies.
  • Boeing (BA - Get Report) slipped after the aerospace giant said it would strip CEO Dennis Muilenburg of his chairman role so he could focus on bringing the grounded 737 MAX aircraft back into service. Boeing is Real Money's Stock of the Day.
  • Nike (NKE - Get Report) climbed after analysts at Bank of America Merrill Lynch lifted their rating of the athletic apparel company and increased their price target, while noting the resurgence of rival Adidas  (ADS - Get Report) as a "significant global competitor."

Wall Street Overview

Stocks finished down Monday after Chinese officials said they wanted to discuss further last week's tentative trade agreement between the world's two largest economies and as Wall Street gears up for the start of the third-quarter earnings season.

The Dow Jones Industrial Average ended down 29 points, or 0.11%, to 26,787, the S&P 500 slipped 0.14%, while the Nasdaq dropped 0.10%. Bond markets were closed for the Columbus Day Holiday.

President Donald Trump on Friday said the U.S. had "a substantial phase one deal with China" in their lengthy trade war, but shares ticked downward following a report Monday that said Chinese officials want more talks with their U.S. counterparts before signing the agreement.

The most concrete takeaway from the agreement was the removal of planned tariff increases on Oct. 15, which would have boosted levies on $250 billion worth of China-made goods by 5 percentage points to 30%.

Treasury Secretary Steven Mnuchin told CNBC Monday that he expects the next round of tariffs on Chinese goods scheduled for mid-December will take effect if no deal is in place between the two economic superpowers.

"I have every expectation if there's not a deal those tariffs would go in place, but I expect we'll have a deal," Mnuchin said.

Mnuchin had described the accord reached as more of a "fundamental understanding on the key issues," telling reporters that "we will not sign an agreement unless we get and can tell the president that this is on paper."

Mnuchin said the U.S. expects China to buy $40 billion to $50 billion worth of agriculture products. He also said that China will be removing some tariffs on imports of U.S. goods.

"As many lingering questions remain, there is significant doubt that this truce will hold through 2020," Glenmede Trust said in a note. "Likely, these issues will reappear in some form before the election, perhaps in the form of renewed tariff threats or actions targeting individual Chinese companies."

Trump said on Twitter that he would soon issue an order sanctioning Turkish government officials, increasing tariffs on Turkish steel up to 50% and "immediately" halting negotiations with the country regarding a $100 billion trade agreement. Earlier Mnuchin had said "the sanctions were ready to go."

"Turkey's military offensive is endangering civilians and threatening peace, security, and stability in the region," Trump wrote.

The third-quarter earnings season in the U.S. kicks off this week with a spate of big bank financial updates. JPMorgan Chase  (JPM - Get Report) , Citigroup (C - Get Report) , Goldman Sachs (GS - Get Report)  and Wells Fargo (WFC - Get Report) are among those slated to report earnings.

Nike (NKE - Get Report) climbed 1.1% to $94.87 after analysts at Bank of America Merrill Lynch lifted their rating of the athletic apparel company and increased their price target, while noting the resurgence of rival Adidas AG (ADS - Get Report) as a "significant global competitor."

Boeing (BA - Get Report) dipped slightly to $372.92 after the aerospace giant said it would strip CEO Dennis Muilenburg of his chairman role so he could focus on bringing the grounded 737 MAX aircraft back into service. Boeing is Real Money's Stock of the Day.

Netflix (NFLX - Get Report) climbed nearly 1% to $285.53 after Raymond James cut its price target on the online entertainment company to $415 from $450 and maintained its strong buy rating. Netflix is scheduled to report earnings on Wednesday.

Uber (UBER) advanced 3.2% to $31.10 after the ride-sharing company said will off about 350 employees in several divisions, including self-driving and eats.

Citigroup, Goldman Sachs, and JPMorgan are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.