Stocks have pulled back a bit this morning, though the declines across the major averages have remained relatively modest. In the U.S., earnings continue to top a lowered bar, but GDP growth in China slowed to a near 30 year low in the third quarter in another sign that trade tensions are hitting the economy. Brexit uncertainty is also back in the forefront as PM Boris Johnson will try to get his deal with the EU through the U.K. Parliament this weekend.
ECONOMIC EVENTS: In the U.S., Conference Board's Leading Economic Index declined 0.1% to 111.9 in September.
In China, third quarter GDP growth came in a bit lower than expected with a 6.0% year-over-year gain. However, industrial production was firmer than expected in September with growth of 5.8% and retail sales were in-line with the consensus forecast, rising 7.8%.
TOP NEWS: Shares of Coca-Cola (KO) are up nearly 3% after the beverage giant posted in-line earnings and better than expected revenue for the third quarter. The company, which grew unit case volume by 2% in the quarter, sees at least 5% growth in organic revenues for this fiscal year and raised its FY19 cash from operations view by $300M to at least $8.8B.
American Express (AXP) reported better than expected quarterly earnings and revenue, with its CEO touting the company's ninth straight quarter of currency-adjusted revenue growth of at least 8%. However, its Q4 revenue growth view of 8%-10% may be seen as a bit of a disappointment for investors, who are pushing the shares down 1% so far today.
Johnson & Johnson (JNJ) shares are down over 4% after the company announced a voluntary recall in the U.S. of a single lot of its Johnson's Baby Powder in response to an FDA test indicating the presence of "sub-trace levels" of chrysotile asbestos contamination. At this stage of its investigation, J&J said it cannot confirm if cross-contamination of the sample caused a false positive, whether the sample was taken from a bottle with an intact seal or whether the sample was prepared in a controlled environment, or whether the tested product is authentic or counterfeit, but the news is certainly going to make headlines and raise concern given the talc-related lawsuits the company is facing nationwide. The company is fighting about 14,200 claims that Johnson's Baby Powder and other of the company's talc products cause cancer, The Wall Street Journal has previously reported.
Shares of retailers Macy's (M), L Brands (LB) and Gap (GPS) were under pressure on Friday morning after the trio were all downgraded to Underperform at Credit Suisse. Analyst Michael Binetti said his firm's checks, along with recent commentary from Levi Strauss (LEVI) and Hugo Boss, suggest industry trends in the U.S. remained "sluggish" in Q3 and he expects these pressured trends to continue into the fall/holiday season. Looking ahead, the Credit Suisse analyst said that if better holiday trends in 2019 don't materialize, he thinks it will be increasingly tough for softline retailers to avoid even more and bigger store closures in 2020. Binetti added that his real estate contacts are actually bracing for another round of large scale store closure announcements after the holiday.
MAJOR MOVERS: Among the noteworthy gainers was Dermira (DERM), which rose 30% after it presented primary results from its Phase 2b lebrikizumab study. Also higher was E-Trade (ETFC), which gained 6% after reporting quarterly results.
Among the notable losers was Gildan Activewear (GIL), which fell 24% after reporting lower than expected preliminary third quarter results and cutting its guidance for fiscal 2019. Also lower was Altassian (TEAM), which dropped 10% after reporting quarterly results.
INDEXES: Near midday, the Dow was down 95.33, or 0.35%, to 26,930.55, the Nasdaq was down 57.65, or 0.71%, to 8,099.20, and the S&P 500 was down 7.84, or 0.26%, to 2,990.11.