Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average finished down as President Trump said he's not ready to do a trade deal with China and the U.S. won't do business with China's Huawei Technologies until a deal is reached.
- Uber Technologies (UBER) shares fell after the ride-sharing company reported a wider-than-expected second-quarter loss and warned that more red ink would flow in the months ahead. Uber is Real Money's Stock of the Day.
- Activision Blizzard (ATVI - Get Report) shares were down after the videogame maker posted stronger-than-expected second-quarter earnings but guided for slower profit growth into the second half.
Wall Street Overview
Stocks finished down Friday, ending a wild session and a volatile week, as President Donald Trump said the U.S. will cut ties with China's Huawei Technologies until the world's two largest economies reach a trade deal, something he said he isn't ready to do.
The Dow Jones Industrial Average, which was down as much as 280 points, moved briefly into positive territory late in the session before ending down 90 points, or 0.34%, to 26,287. The S&P 500 declined 0.66% and the Nasdaq was off 1%.
Trump's comments followed a report that said Washington could delay licenses for American companies seeking to do business with Huawei.
He told reporters Friday that the U.S. "had no choice but to do what we're doing with China" and warned that the next round of U.S.-China trade talks scheduled for September could be canceled. Tariffs on another $300 billion of Chinese imports are scheduled to take effect Sept. 1.
"We hold all the cards," Trump said. "We are doing well. We are doing fantastically well."
Trump blacklisted Huawei, the world's biggest handset marker, in May, preventing it from buying U.S. chips. But he agreed last month to give timely licensing decisions to several tech companies. The U.S. took action against Huawei after China stopped buying American agricultural products in response to Trump's surprise tariffs threat last week.
"We are talking to China; we are not ready to make a deal, but we'll see what happens, Trump said.
The news hit chip stocks hard. The PHLX Semiconductor Sector was down 1.8%, and companies such as Micron Technology (MU - Get Report) , Skyworks Solutions (SWKS - Get Report) and Nvidia (NVDA - Get Report) all lost ground.
"People should have no illusions -- stocks are likely to remain volatile until earnings visibility improves," said Alec Young, managing director of global markets research at FTSE Russell. "And with global growth clearly slowing, progress in U.S.-China trade negotiations is critical if investors are to view the earnings outlook positively."
Unfortunately, Young said, "that's the opposite of what we're getting as the G20 trade truce has broken down and President Trump has now called into question whether September's expected trade negotiations will even proceed."
"Consensus earnings expectations still call for an acceleration to high-single-digit growth heading into 2020. Without an end to tariffs, those expectations will come down along with stock valuations," Young said.
China also pegged its yuan north of 7 for the second consecutive session, allowing it to trade past the psychologically important mark for the seventh day in a row, risking further ire from Trump.
"The bears are certainly in control right now and really sinking their teeth into the greater likelihood of a prolonged trade war," Mike Loewengart, vice president of investment strategy at E*Trade.
"Combine this with the dovish trends across central banks globally and investors are seeking shelter in defensive plays," he said. "With a slew of key indicators on deck for next week, there will be even more news for investors and the markets to digest, and more importantly we'll get a better view into the health of the economy."
The U.S. 10-year Treasury yield was up 0.018 to 1.73% in recent trading.
Uber Technologies (UBER) shares fell 6.8% to $40.03 after the ride-hailing company posted a wider-than-expected second-quarter loss of $5.24 billion and warned that more red ink would flow in the months ahead. Uber is Real Money's Stock of the Day.