Stocks opened deep in negative territory as the market’s recent rally began to tire. The market moved in a narrow range during the opening hour as investors digested the latest round of earnings reports. The sellers took control in the second hour following comments from White House economic advisor Larry Kudlow said the U.S. and China still have a “sizable distance” to go in their talks. White House sources also doubted whether President Trump and Chinese President Xi would meet by their imposed March 1 deadline. The averages struggled for the remainder of the day, but the market managed to close off its lows.
In the U.S., initial jobless claims fell 19,000 to 234,000 in the week ended February 2.
In Europe, The European Commission said it now sees the euro-area economy expanding 1.3% this year, down from the 1.9% growth it projected in November. For 2020, the EC sees growth of 1.6%, down from 1.7% it forecast previously.
In trade news, CNBC reported that a meeting between U.S. President Donald Trump and Chinese President Xi Jinping is "highly unlikely" to take place by March 1, the deadline the two parties set for reaching an agreement.
COMPANY NEWS: SunTrust Banks (STI) and BB&T (BBT) announced a definitive agreement to combine in an all-stock merger of equals valued at approximately $66B. Following the deal, which represents the largest bank tie-up in a decade, BB&T shareholders will own approximately 57% and SunTrust shareholders will own approximately 43% of the combined company, expected to be the sixth-largest U.S. bank based on assets and deposits.
Shares of Twitter (TWTR) dropped 10% after the social media platform operator reported better than expected results for the holiday quarter but gave lower than expected revenue guidance for the coming quarter. The company also reported user metrics, and a change in its future reporting of those metrics, that may have raised investor concerns.
Shares of Sangamo Therapeutics (SGMO) plunged 31% after the company presented interim data from the Phase 1/2 EMPOWERS Study evaluating the SB-318 zinc finger nuclease in vivo genome editing product candidate in patients with MPS II, also known as Hunter syndrome. Crispr Therapeutics (CRSP), Editas Medicine (EDIT) and Intellia Therapeutics (NTLA), which are all publicly-traded companies investigating using genome editing technology for disease treatments, also fell in the wake of Sangamo's data presentation.
Meanwhile, shares of Dell Technologies (DELL) were 1% lower after Reuters reported that Dell is exploring a sale of SecureWorks (SCWX), in which it holds an 85% stake following its spinoff in 2016.
MAJOR MOVERS: Among the noteworthy gainers was Edgewell Personal Care (EPC), which rose 5% after it reported quarterly results and announced that CEO David Hatfield will retire. Also higher were HanesBrands (HBI) and Chipotle (CMG), which gained a respective 20% and 11% after reporting quarterly results.
Among the noteworthy losers was Solid Biosciences (SLDB), which plunged 68% after announcing preliminary findings from its trial evaluating the safety and efficacy of SGT-001 microdystrophin gene transfer for the treatment of Duchenne muscular dystrophy, or DMD. Also lower was USA Technologies (USAT), which dropped 50% after it disclosed that its auditor has resigned and that it will restate its financial statements from fiscal 2017 and fiscal 2018. In addition, FireEye (FEYE) and Tapestry (TPR) fell 12% and 15%, respectively, after reporting quarterly results.
INDEXES: The Dow fell 220.77, or 0.87%, to 25,169.53
, the Nasdaq lost 86.93, or 1.18%, to 7,288.35
, and the S&P 500 declined 25.56, or 0.94%, to 2,706.05