By Chris Matthews and William Watts, MarketWatch
Tesla shares rise after Musk denies demand problem
Stocks fell modestly Wednesday, a day after the Dow Jones
Industrial Average snapped a six-day winning streak, as investors
digested a reading on May consumer inflation and continued to eye
the U.S.-China trade fight.
How are the benchmarks performing?
The Dow Jones Industrial Average fell 40 points, or 0.2%, to
26,007, while the S&P 500 index lost 6 points, or 0.2%, to
2,880. The Nasdaq Composite index fell 33 points, or 0.4%, at
7,790.
Stocks ended with small losses Tuesday after flipping between
positive and negative territory. The Dow closed 14.17 points lower
at 26,048.51, off 0.1%, while the S&P 500 shed 1.01 points, or
less than 0.1%, to close at 2,885.72. The Nasdaq finished with a
loss of 0.6 points at 7,822.57. The declines ended five-day winning
streaks for both the S&P and the Nasdaq.
What's driving the market?
U.S. price inflation remains tame, according to the Labor
Department's Consumer Price index
(http://www.marketwatch.com/story/consumer-inflation-rises-01-in-may-smallest-bump-in-4-months-cpi-shows-2019-06-12),
which showed prices rising 0.1% in April, in line with the
consensus forecast, according to a MarketWatch poll of
economists.
The increase in the cost of living over the past 12 months also
slowed to 1.8% from 2%. When eliminating volatile food and energy
prices, inflation fell from 2.1% annually to 2%.
Though the measure isn't as closely followed by the Federal
Reserve as the personal consumption expenditures index, this latest
evidence that price growth is slowing could support investors
belief that the Federal Reserve will cut interest rates sooner than
later.
But U.S. President Donald Trump on Tuesday said he was the one
"holding up" a trade deal with China,
(http://www.marketwatch.com/story/trump-i-have-no-interest-in-trade-deal-until-china-reverses-its-stance-2019-06-11)
saying the two countries would "either do a great deal...or we're
not doing a deal at all."
Analysts blamed the remarks for casting a somewhat negative tone
over global equities.
Investors are also watching protests in Hong Kong. Police on
Wednesday fired tear gas and high-pressure water hoses
(http://www.marketwatch.com/story/renewed-protests-in-hong-kong-as-government-debates-extradition-bill-2019-06-11)
at protesters who massed outside government headquarters in
opposition to a proposed extradition bill that has sparked concerns
over China's control of the semi-autonomous territory.
What companies are in focus?
Shares of electric car maker Tesla Inc. (TSLA) rose 1.8%, after
Chief Executive Elon Musk late Tuesday took the stage at the
company's shareholder meeting and denied the company was facing
demand and production problems
(http://www.marketwatch.com/story/elon-musk-tesla-does-not-have-a-demand-problem-2019-06-11).
In deal news, France's Dassault Systems SE said it reached an
agreement to acquire U.S. technology group Medidata Solutions
Inc.(MDSO) in an agreement valued at $5.8 billion. Dassault will
offer $92.25 a share for Medidata in an all-cash deal. Medidata
shares fell 3.6% Wednesday at $90.75 a share.
Shares of Mattel Inc. (MAT) rose 8.8% Wednesday, after reports
(http://www.marketwatch.com/story/mattel-shares-jump-5-on-reports-of-rejected-merger-offer-2019-06-12)
the toy company turned down a merger offer from MGA Entertainment
Inc. It also announced it has extended its licensing agreement with
Warner Bros.
Shares of Dave & Buster's Entertainment Inc. (PLAY) tumbled
21.3%
(http://www.marketwatch.com/story/dave-busters-stock-tanks-after-companys-quarterly-miss-lowered-guidance-2019-06-11)
Monday, after the operator of entertainment and dining venues
reported Tuesday evening first-quarter sales and earnings that fell
short of Wall Street expectations.
Neptune Wellness Solutions Inc. (NEPT.T) announced a 3-year
sourcing agreement
(http://www.marketwatch.com/story/neptune-wellness-stock-soars-again-after-another-3-year-extraction-deal-with-a-cannabis-company-2019-06-12)
with cannabis company Green Organic Dutchman Holdings Ltd. Neptune
shares rose 3.7% Wednesday.
Salesforce.com Inc. (CRM) said Wednesday
(http://www.marketwatch.com/story/salesforce-corrects-earnings-expectations-around-tableau-deal-2019-06-12)
that a recently announced acquisition of Tableau Software Inc.
(DATA) would reduce 2020 earnings less than initially assumed. The
stock rose 0.9% Wednesday morning.
Shares of Cisco Systems Inc. (CSCO) fell 1.5% Wednesday, after
William Blair analyst Jason Ader cut his rating
(http://www.marketwatch.com/story/cisco-stock-falls-after-william-blair-downgrade-2019-06-12)
on the stock to market perform from outperform.
What are analysts saying?
"This morning's inflation data adds more fuel to the rate cut
fire and increasingly supports the Fed's dovish stance,' wrote Mike
Loewengart, vice president of investment strategy at E-Trade, in an
email.
"We could likely see the markets react well to this news," he
added. "While we are experiencing pockets of weakness on the jobs
front, the big takeaway for investors today is that economic
fundamentals are still quite strong and there continues to be
reasons to be optimistic about the state of our economy--sure
growth is slowing, but that does not mean its shrinking."
"President Trump has defended his use of levies, and the threat
of higher levies, as a way of trying to rebalance the trading
relationship with China. Beijing have reiterated their willingness
to hold a firm line against the U.S. The standoff is back at the
forefront of dealers' minds and it has prompted some investors to
take some money off the table," said David Madden, market analyst
at CMC Markets UK, in a note.
How are other markets trading?
The yield on the 10-year U.S. Treasury note
(http://www.marketwatch.com/story/treasury-yields-extend-decline-after-may-cpi-data-2019-06-12)
retreated one basis point to 2.121%.
Asian markets traded down Wednesday
(http://www.marketwatch.com/story/asian-markets-retreat-hang-seng-sinks-amid-hong-kong-protests-2019-06-11),
with Japan's Nikkei 225 losing 0.4%, China's Shanghai Composite
index sliding 0.6%, and Hong Kong's Hang Seng index retreating
1.7%, amid civil unrest in the semi-autonomous territory. European
stocks were also trading lower, as evidenced by the 0.3% decline in
the Stoxx Europe
In commodities markets, the price of crude oil
(http://www.marketwatch.com/story/gold-renews-climb-spurred-on-by-weaker-stocks-and-worrisome-geopolitical-headlines-2019-06-12)
slid 2.8%, while gold
(http://www.marketwatch.com/story/gold-renews-climb-spurred-on-by-weaker-stocks-and-worrisome-geopolitical-headlines-2019-06-12)
jumped 0.5%. The U.S. dollar , meanwhile, edged higher against its
peers.
(END) Dow Jones Newswires
June 12, 2019 11:27 ET (15:27 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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