Category: Stock Market News

The Dow Jones Industrial Average drifted to session lows Thursday afternoon as the stock market digested a second round of testimony from newly minted Federal Reserve Chairman Jerome Powell and the threat of tariffs on steel and aluminum imports. The Dow was off 160 points, or 0.6%, at 24,875, with sharp declines in shares of United Technologies Corp. and Boeing Co. contributing the downward pressure on the blue-chip benchmark. The S&P 500 index was down 0.4% at 2,702, while the Nasdaq Composite Index declined 0.4% at 7,238. Stocks have been volatile but took a leg lower on reports that President Donald Trump would impose tariffs on steel and aluminum imports. “We’re going to build our steel industry back and we’re going to build or aluminum industry back,” Trump said during a news conference on Thursday. “We’re going to be instituting tariffs next week,” the president said. Trump’s comments, from a White House gathering with leaders in the steel and aluminum business, raise the specter of protectionist trade policies that could unsettle investors–at least in the short term. Meanwhile, earlier Thursday, Powell attempted to moderate comments he made on Tuesday in congressional testimony by emphasizing that the economy wasn’t overheating.

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President Donald Trump told steel and aluminum executives on Thursday that the U.S. would announce tariffs on imports of those products next week, according to a White House pool report. Trump said the U.S. would set tariffs of 25% for steel and 10% for aluminum. Trump is meeting with executives of companies including U.S. Steel Corp. , Nucor Corp. and Century Aluminum Co. .

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Medicines Company shares surged 6.2% in heavy morning trade on Thursday after the company reported plans to restructure its board and reduce the number of board members from 12 to seven in a financial filing. The board has decided to nominate seven board members for election at the 2018 annual shareholder meeting, more than half of which are connected to activist investor Alex Denner of Sarissa Capital, according to a CNBC report. Denner, a Carl Icahn protégé and well-known biopharma hedge fund player, was previously appointed to the company’s board in early 2016. Medicines Company shares have surged 14.3% over the last three months, compared with a 2.5% rise in the S&P 500 .

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The Dow Jones Transportation Average shot up 101 points, or 1.0%, in midday trade Thursday, with 18 of 20 components gaining ground, bucking the slight weakness in its industrials counterpart. The Dow Jones Industrial Average was down 15 points, or 0.1%. Many market watchers view the Dow transports and Dow industrials as having a symbiotic relationship, the idea being one tracks companies that take the things that the companies in the other index makes. The indexes’ correlation coefficient is 0.9601 over the past 20 years, and 0.9775 over the past 10 years, according to an analysis of FactSet data. Among the Dow transports’ biggest gainers on Thursday, shares of United Parcel Service Inc. rallied 3.5%, CSC Corp. climbed 2.9% and Ryder Systems Inc. advanced 1.4%.

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Apple Inc. captured 87% of global smartphone industry profits in the December quarter, according to Canaccord Genuity analyst Michael Walkley, up from 72% in the September period. That profit-share growth stemmed from a greater mix of expensive iPhones, he wrote in a Thursday note to clients. The iPhone X began shipping during the December quarter. ” We believe strong sales and mix of the iPhone X will sustain strong gross margin dollars given the high price points and likely improving manufacturing efficiencies,” Walkley wrote, adding that he thinks Apple is increasing its leading share of the premium smartphone market. He believes a greater mix of OLED phones in the next cycle will help sales and margins. Apple shares are up 0.2% in Thursday morning trading and up 28% over the past 12 months, while the Dow Jones Industrial Average has gained 19%.

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Global wearable shipments rose 10.3% in 2017, according to market research firm IDC, as smartwatches gained popularity. IDC said Thursday that Apple Inc. led all wearable makers in shipments during the year, shipping 17.7 million devices, up 55.9% over 2016’s numbers. Apple doesn’t report its own shipment or sales numbers for the Apple Watch. Xiaomi shipped 15.7 million devices during 2017, according to IDC, while Fitbit Inc. shipped 15.4 million. “User tastes have become more sophisticated over the past several quarters and Apple pounced on the demand for cellular connectivity and streaming multimedia,” IDC research director Ramon Llamas said in a release. “What will bear close observation is how Apple will iterate upon these and how the competition chooses to keep pace.” IDC noted that several players exited the market in 2017. Apple shares are up 28% over the past 12 months, while Fitbit shares are down 23% and the S&P 500 Index is up 13%.

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Shares of steel makers pulled back sharply from intraday highs, after CNBC reported that President Trump won’t announce tariffs on steel and aluminum imports on Thursday, was investors had previously anticipated. AK Steel Holding Corp.’s stock was up 3.8%, but had been up as much as 12% earlier. Among shares of other steel makers: U.S. Steel Corp. was up as much as 8.4% earlier, but has pared gains to be up 2.8%; Nucor Corp. rose 1.8% after being up as much as 3.7% at its high; Steel Dynamics Inc. was up 4.3% at its high, but pared gains to be up 1.9%. In the aluminum sector, Alcoa Corp.’s stock edged up 0.2% after rallying as much as 2.8% earlier. The S&P 500 gained 0.2% at 2,719, just off its intraday high of about 2,731.

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The Dow Jones Industrial Average gained altitude late Thursday morning as Federal Reserve Chairman Jerome Powell said there’s no evidence the economy is overheating, and emphasized that a “gradual path” to raising rates was appropriate. The comments came in the Fed boss’s second day of congressional testimony, this time in front of the Senate Banking Committee. Powell said “nothing suggests wage inflation is at the point of acceleration. Fears of out-of-control inflation has been the biggest bugaboo for the market in recent weeks, helping drive stocks into correction territory early last month. A correction is defined as a drop from a recent peak of at least 10%. On Tuesday, Powell’s testimony in front of a House committee, his first as a Fed chief, resulted in a selloff for stocks and pushed yields higher because they were interpreted as the Fed adopting a more aggressive monetary-policy path. As a part of his House testimony Powell said his personal view was that rate hikes were warranted given the strength of the U.S. economy, leading investors to price in a higher probability for four rate increases rather than three for 2018. Signs of rising inflation can prompt selling in bonds, driving yields higher and prices lower. Higher bond yields and the prospect of rate increases also can serve as a dampener for equity appetite, compared against the perceived safety of government bonds. The S&P 500 index was up 0.3% at 2,721, while the Nasdaq Composite Index rose 0.2%, in recent action.

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The U.S. dollar index pared some of its gains on Thursday, falling back from its highest level since mid-January, as Federal Reserve Chairman Jerome Powell told Congress there was some slack left in the labor market. Powell, who was giving the second part of his maiden congressional testimony on Thursday, said that “nothing suggests wage inflation is at the point of acceleration,” and that the labor market could strengthen some without leading to higher consumer price inflation. The response came on the back of a comments concerning whether the Fed could be hiking interest rates too quickly, which was also worry among market participants late last year. Since then, analysts have begun pricing in four rather than three interest rate hikes in 2018, partly on the back of Powell’s comments on Tuesday, in which he praised the U.S. economic outlook. The ICE U.S. Dollar Index was last up 0.1% at 90.711.

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President Trump won’t announce tariffs on imports of steel and aluminum on Thursday, according to a CNBC report. He is reportedly meeting with industry executives at 11 a.m. Eastern. Trump tweeted early Thursday that those industries have been “decimated” by unfair trade but did not hint at an imminent announcement.

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