Stocks opened in negative territory on concerns of global growth slowing following a dip in China's GDP growth. With the U.S. government shut down now in its 33rd day, corporations are also more cautious about future growth. As the earnings season picks up in earnest during this week, investors will be listening to guidance commentary for clues about how the government shutdown and trade war with China may affect growth.
ECONOMIC EVENTS: In the U.S., existing home sales fell sharply in December. The annualized rate of sales declined 6.4% to 4.99M homes, which marked the lowest level since November 2015.
In China, GDP grew 6.4% in the fourth quarter of 2018 from a year earlier, which was in line with expectations. However, it was slower than the previous quarter's 6.5% growth and the weakest expansion since the financial crisis.
In trade news, the Financial Times reported that the Trump administration rejected an offer by two Chinese vice-ministers to travel to the U.S. this week for preparatory trade talks. U.S. officials cancelled this week's face-to-face meetings with a vice-minister of commerce and a vice-minister of finance due to a lack of progress on "forced" technology transfers and "structural" reforms to China's economy, according to FT. Afterward, National Economic Council director Larry Kudlow said in an interview with CNBC that the U.S. is in "constant communication" with China about trade and that earlier reports about meetings being cancelled are "not true."
COMPANY NEWS: Shares of Arconic (ARNC) plunged 16% after the company announced that its board of directors has determined to no longer pursue a potential sale of the company after it did not receive a proposal for a full-company transaction that it believes "would be in the best interests of Arconic's shareholders and other stakeholders."
Dow members Johnson & Johnson (JNJ) and Travelers (TRV) both issued their earnings reports for the last quarter of 2018. The pharmaceutical and personal care giant fell 1.4% despite earnings and revenue that topped the consensus forecast, while the insurance major closed 1.3% lower.
eBay (EBAY) shares jumped 6% after Elliott Management announced an over 4% stake and urged the company to make changes, including undertaking a portfolio review. The activist investor stated in a publicly disclosed letter to the company's board that it believes eBay could be valued at $55-$63 per share if the company takes steps the firm recommends.
Meanwhile, Twitter (TWTR) was in focus after the company said that a "new twitter.com is coming" with a new URL.
Additionally, Wells Fargo (WFC) raised its quarterly dividend 5% to 45c per share, payable March 1 to stockholders of record on February 1.
MAJOR MOVERS: Among the noteworthy gainers was PG&E (PCG), which rose 6.5% after securing $5.5B in debtor-in-possession financing. Also higher was New Oriental Education (EDU), which gained 8% after reporting quarterly results.
Among the notable losers was Editas Medicine (EDIT), which dropped 20% after announcing that Katrine Bosley has opted to step down from her role as president and CEO. Also lower was Stanley Black & Decker (SWK), which fell 15.5% after reporting quarterly results.
INDEXES: The Dow fell 301.87, or 1.22%, to 24,404.48 , the Nasdaq lost 136.87, or 1.91%, to 7,020.36 , and the S&P 500 declined 37.81, or 1.42%, to 2,632.90 .
Stanley Black & Decker
-21.26 (-15.53%)
Arconic
-3.27 (-16.07%)
Johnson & Johnson
-1.89 (-1.45%)
Travelers
-1.73 (-1.40%)
eBay
+1.92 (+6.19%)
-1.01 (-3.04%)
Wells Fargo
-0.14 (-0.28%)
PG&E
+0.51 (+7.06%)
New Oriental Education
+5.395 (+8.19%)
Editas Medicine
-5.215 (-19.94%)