Daily Stock Market Update — Friday, Oct. 19
U.S. stocks gave up an early rally Friday and are bouncing between small gains and losses in late afternoon trading, capping a week of unusually choppy trading.
Consumer products maker Procter & Gamble is on pace for its biggest gain in 10 years after reporting strong sales of beauty products in its latest quarter. Retailers are down and smaller companies dropped again after a report showed U.S. home sales fell for the six month in a row.
While stocks are on track to finish the week slightly higher, most of the market’s recent gains have been swiftly followed by losses. The S&P 500 hasn’t risen two days in a row since Sept. 20, the last day of a three-day string of gains. That was also the day of the benchmark index’s most recent record high. It’s down 5.6 percent since then.
KEEPING SCORE: The S&P 500 index lost a single point to 2,767 at by closing time after it fell 1.4 percent on Thursday. The Dow Jones Industrial Average gave up most of an early gain. It jumped as much as 229 points early on but closed up 69 points, or 0.3 percent, to 25,449.
The S&P 500 has fallen for three weeks in a row, but is on track to rise 0.1 percent this week.
The Nasdaq composite sagged 36 points, or 0.5 percent, to 7,449. The Russell 2000 index of smaller-company stocks lost 19 points, or 1.2 percent, to 1,541. The Russell 2000 is at its lowest in almost six months as investors worry that the U.S. economy could slow and interest rates could rise, a bigger challenge for smaller companies.
LOOKING GOOD: The world’s largest consumer products maker is on track for its biggest gain in a decade. Procter & Gamble said sales of fabric and home care products edged higher in its latest quarter while beauty products revenue jumped 20 percent. The maker of Tide detergent, Pampers diapers and Gillette razors posted a bigger profit than analysts expected and its stock added 8.6 percent to $87.15.
HONEYWELL SOURS: Aerospace and building components maker Honeywell lagged the rest of the market. It posted a bigger profit than analysts expected, but it also said it is seeing more signs of inflation in its business as a result of the tariffs the U.S. and China have placed on imported goods. Honeywell slid 0.8 percent to $153.93. Industrial companies have skidded recently as investors worried about the results of those trade tensions.
THE QUOTE: After an early rally, the market settled back into its usual pattern from the last two weeks, as companies that depend on economic growth struggled and those with more “defensive” qualities did better. That’s happened as investors worried about a few threats to growth: rising interest rates, trade tensions between the U.S. and China, and this week, some sluggish reports from the housing sector.
“We don’t see too many other yellow or red flags right now, but that’s certainly one of them,” said Mona Mahajan, U.S. investment strategist for Allianz Global Investors. Mahajan said that company earnings aren’t doing much for the stock market right now because investors know the next two quarters should be strong, and they’re concerned that growth in 2019 will be worse than expected.
Big technology and consumer-focused stocks were mixed. Apple rose 1.4 percent to $219.12 while Amazon fell 0.6 percent to $1,760.69. Among household goods makers, Pepsi rose 2.2 percent to $110.32 and Coca-Cola added 1.7 percent to $46.40. Electric utility Duke Energy rose 2 percent to $82.91.
BONDS: Bond prices slipped. The yield on the 10-year Treasury note rose to 3.19 percent from 3.17 percent.
ASIA: China said economic growth sank to a post-financial crisis low of 6.5 percent in the third quarter. Chinese finance officials launched a media blitz to shore up confidence in the country’s sagging stock market. China’s economy has gradually slowed for years, even before a trade dispute between Beijing and U.S. President Donald Trump led to higher tariffs. The Chinese government tightened controls on lending last year to rein in a debt boom, but that, too, has affected the economy.
Hong Kong’s Hang Seng rose 0.4 percent Seoul’s Kospi added 0.4 percent. Tokyo’s Nikkei 225 shed 0.6 percent.
EUROPE: Germany’s DAX lost 0.3 percent and France’s CAC 40 sank 0.6 percent. London’s FTSE 100 gained 0.3 percent and the FTSE MIB was little changed. Tensions between European Union officials and Italy’s new government sent Italian stocks and government bond prices lower Thursday. Italian bond prices turned higher Friday and yields slipped.
ENERGY: Benchmark U.S. crude rose 0.7 percent to $69.12 per barrel in New York. Brent crude, used to price international oils, gained 0.6 percent to $79.78 a barrel in London.
Wholesale gasoline rose 1.2 percent to $1.91 a gallon. Heating oil inched up 0.3 percent to $2.30 a gallon. Natural gas added 1.6 percent to $3.25 per 1,000 cubic feet.
METALS: Gold dipped 0.1 percent to $1,228.70 an ounce. Silver rose 0.3 percent to $14.65 an ounce. Copper gained 1.1 percent to $2.78 a pound.
CURRENCY: The dollar rose to 112.58 yen from 112.20 yen. The euro rose to $1.1513 from $1.1465.
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