The Dow and S&P closed at all-time highs yesterday while the Nasdaq finished just under a record level, but stocks are seeing some profit taking this morning amid signs that negotiations with China on a trade deal may be stumbling. Additionally, weak economic data out of China is reinforcing concerns that the trade war is weighing on the global economy.
ECONOMIC EVENTS: In the U.S., initial jobless claims rose 14,000 to 225,000 in the week ended October 9, which was a larger than expected jump. The headline Producer Prices Index rose 0.4% in October, with the core rate up 0.3%, pointing to hotter than expected inflation.
In China, industrial production growth of 4.7% in October missed the 5.4% growth forecast, retail sales growth of 7.2% fell short of the 7.8% projection, and China's fixed-asset investment increased by a less then expected 5.2% from a year earlier.
In Europe, the preliminary third quarter GDP report for the Eurozone was firmer than expected, with year-over-year growth of 1.2% that topped the 1.1% consensus growth forecast. Of note, Germany narrowly avoided recession with GDP growth of 0.1% in the quarter.
TOP NEWS: Shares of Walmart (WMT) are slightly lower near midday after the world's largest retailer's Q3 adjusted earnings beat expectations, leading to a FY19 guidance raise. Baird analyst Peter Benedict said the quarterly report reinforces his positive thesis on the stock, calling out continued strong U.S. comps, robust U.S. e-commerce growth and positive year-over-year underlying operating profit growth as "key highlights."
Cisco Systems (CSCO) shares are 7% lower despite an earnings beat in the company's first fiscal quarter as the networking gear provider gave an outlook for sales growth of down 3% to down 5% year-over-year in the upcoming quarter that Citi analyst Jim Suva said is "much worse than expected."
Maxim analyst Nehal Chokshi downgraded Apple (AAPL) to Sell on Thursday, citing his belief that iPhone sales would be lower than expected in 2020. The analyst's Sell rating is somewhat rare and comes amid a wealth of more bullish recent commentary from Chokshi's peers.
American Outdoor Brands (AOBC) announced that its board has approved proceeding with a plan to break-up into two independent publicly traded companies: Smith & Wesson Brands, which would encompass the firearm business, and American Outdoor Brands, which would encompass the outdoor products and accessories business. After the announcement, Craig-Hallum analyst Steve Dyer raised his price target for American Outdoor Brands shares to $12 from $10, saying that while the company's planned separation has "pros and cons," the stock is "materially undervalued" and value could be unlocked via a spinoff.
MAJOR MOVERS: Among the noteworthy gainers was Axonics (AXNX), which rose 17% after it received FDA approval of its r-SNM System.
Also higher were Dillard's (DDS) and NetApp (NTAP), which gained a respective 10% and 4% after reporting quarterly results.
Among the notable losers was Ribbon Communications (RBBN), which slid 22% after it agreed to acquire ECI Telecom Group in a cash and stock deal and announced the departure of CEO Franklin Hobbs.
Also lower were Canopy Growth (CGC) and Weibo (WB), which fell 17% and 15%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 9.61, or 0.03%, to 27,773.98, the Nasdaq was down 13.57, or 0.16%, to 8,468.53, and the S&P 500 was flat at 3,094.04.