Stocks opened in negative territory as the optimism surrounding the trade talks with China began to fade. President Trump was non-committal about the progress of the talks, instead saying hopefully a deal can be struck. The market saw its lows shortly after the open as investors seemed to be waiting on Fed Chairman Powell’s testimony before the Senate Banking Committee. Powell said the economy is in good shape despite recent conflicting economic reports. There was nothing new revealed in his testimony and the averages drifted in a narrow range for the remainder of the session, finishing little changed from where they'd started the day.
ECONOMIC EVENTS: In the U.S., housing starts dropped 11.2% to a 1.078M rate in December, missing expectations. The FHFA home price index edged up 0.3% to 270.2 in December. The Case Shiller 20-city home price index fell 0.23% to 212.96 in December. The Conference Board Consumer Confidence Index jumped to 131.4 from a 16-month low of 121.7 in January.
Fed Chairman Jerome Powell, in his semi-annual monetary policy report to Congress, stated, "While we view current economic conditions as healthy and the economic outlook as favorable, over the past few months we have seen some crosscurrents and conflicting signals. Financial markets became more volatile toward year-end, and financial conditions are now less supportive of growth than they were earlier last year. Growth has slowed in some major foreign economies, particularly China and Europe. And uncertainty is elevated around several unresolved government policy issues, including Brexit and ongoing trade negotiations."
TOP NEWS: Dow member Home Depot (HD) slid about 1% after the home improvement giant reported lower than expected fourth quarter profits and gave a lower than expected earnings outlook for the new year. However, Home Depot also announced a $15B share repurchase program and raised its dividend 32%.
Shares of Tesla (TSLA) were in focus after the Securities Exchange Commission reportedly asked a judge to hold CEO Elon Musk in contempt for violating an agreement requiring him to seek pre-approval from the company for social media posts and other written communication that would be material to Tesla or its investors. The agency claims the executive breached the deal with a February 19 tweet about car production. Following the SEC's request, Musk responded via Twitter that the "SEC forgot to read Tesla earnings transcript, which clearly states 350k to 500k. How embarrassing ..." Subsequently, U.S. District Judge Alison Nathan ordered Musk to explain by March 11 why he should not be held in contempt in his case against the SEC.
Shares of Caterpillar (CAT) fell 2% after the heavy equipment maker was downgraded to Sell at UBS, which predicted that the majority of the company's end markets will peak this year.
The U.S. Court of Appeals in Washington D.C. upheld a lower court ruling in support of AT&T's (T) Time Warner acquisition, concluding that "the government's objections that the district court misunderstood and misapplied economic principles and clearly erred in rejecting the quantitative model are unpersuasive."
Meanwhile, JPMorgan (JPM) was in focus after CEO Jamie Dimon said at the bank's Investor Day that the company is prepared for, but not predicting, a recession. Dimon added that geopolitics continue to pose a risk to his business and that he anticipates staying in his role for five more years, or "maybe four."
In addition, shares of Ford (F) were 1.25% higher after the Wall Street Journal reported that the Volkswagen (VLKAY) is planning an investment of around $1.7B in the U.S. car maker's Argo self-driving unit.
MAJOR MOVERS: Among the noteworthy gainers was Ferroglobe (GSM), which jumped 26.5% after reporting quarterly results and after announcing that CFO Phillip Murnane has taken a temporary medical leave of absence. Also higher after reporting quarterly results were Tenet (THC) and Etsy (ETSY), which gained a respective 11% and 16%.
Among the notable losers was SunOpta (STKL), which declined 43% after reporting quarterly results, announcing the termination of David Colo as president and CEO, and providing an update on its Value Creation Plan. Also lower after reporting quarterly results were Discovery (DISCA) and TransEnterix (TRXC), which fell 3% and 16%, respectively.
INDEXES: The Dow fell 33.97, or 0.13%, to 26,057.98 , the Nasdaq lost 5.16, or 0.07%, to 7,549.30 , and the S&P 500 declined 2.21, or 0.08%, to 2,793.90 .
Home Depot
-1.71 (-0.90%)
Tesla
-0.85 (-0.28%)
Caterpillar
-3.45 (-2.44%)
AT&T
+0.1 (+0.32%)
JPMorgan
-0.79 (-0.74%)
Ford
+0.11 (+1.25%)
Symbol is now VWAGY
+ (+0.00%)
Ferroglobe
+0.57 (+25.91%)
Tenet Healthcare
+2.79 (+11.53%)
Etsy
+9.5 (+16.07%)
SunOpta
-1.71 (-42.75%)
Now WBD
-0.84 (-2.87%)
TransEnterix
-0.5 (-15.58%)