Stocks opened little changed but in negative territory and saw their best levels shortly after the open. The market weakness is being attributed to investors growing anxious about the lack of news on the trade talks with China. The market did not react to the early economic data, including the trade balance and ADP employment report, but investors will be watching the Fed's Beige book report this afternoon. Oil prices remain lower but off their worst levels with the price of WTI crude trading just below $56 a barrel.
ECONOMIC EVENTS: In the U.S., ADP reported private payrolls increased 183,000 in February, which was close to expectations. The trade deficit widened 18.8% to $59.8B in December. EIA inventory data showed a greater than expected weekly 7.1M barrel rise in crude supplies.
TOP NEWS: General Electric (GE) shares continued the slide that began yesterday afternoon after CEO Larry Culp announced at an investor conference that he expects adjusted industrial free cash flow this year to turn negative versus the $4.5B generated in 2018. Following yesterday's presentation by Culp, influential JPMorgan analyst Stephen Tusa says he believes his unchanged price target of $6 "looks generous" and kept a Neutral rating on GE. The stock, which fell 5% yesterday, has declined another 7% this morning.
Exxon Mobil (XOM) shares were down 2% near noon as the company held its annual investor day. Prior to the event's start, Exxon stated that it expects annual earnings potential to increase by more than 140% by 2025 from 2017 adjusted earnings, assuming an oil price of $60 per barrel and based on 2017 margins. This compares with last year's estimated increase of 135% between 2017 and 2025, based on 2017 adjusted earnings.
In M&A news, Aon (AON) announced that it was required yesterday to issue a statement "at a very early stage in the consideration of a potential all-share business combination" with Willis Towers Watson because the latter is subject to Irish regulatory requirements. However, Aon confirmed today that it does not intend to pursue such a business combination, sending its own shares up 4% and those of Willis Towers Watson down 6%.
Credit Suisse analyst Michael Binetti said Ross Stores (ROST) delivered "solid" Q4 earnings, despite a fashion miss in its biggest category of ladies apparel. Ross Stores, which also raised its quarterly dividend 13% and authorized a new $2.55B stock buyback program, is up fractionally following its quarterly report.
Also rising following its quarterly report is Dollar Tree (DLTR), which gained 3% after it reported roughly in-line earnings on better than expected sales and said it is accelerating its store optimization program. The company currently expects to renovate at least 1,000 Family Dollar stores, "re-banner" an additional 200 Family Dollar stores to Dollar Tree stores and accelerate its pace of Family Dollar store closings by shutting down as many as 390 additional under-performing stores.
MAJOR MOVERS: Among the noteworthy gainers was Zayo (ZAYO), which jumped 12% after it postponed its analyst day to explore strategic alternatives. Also higher were Abercrombie & Fitch (ANF) and AeroVironment (AVAV), which gained a respective 22% and 17% after reporting quarterly results.
Among the notable losers was JinkoSolar (JKS), which slid 8% after Vertical Group analyst Gordon Johnson said he believes the stock is a "screaming short" given that the company has not denied they are obligated for upcoming debt due at Jinko Power. Also lower were NIO Inc. (NIO) and United Natural Foods (UNFI), which fell 21% and 6.5%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was down 113.43, or 0.44%, to 25,693.20, the Nasdaq was down 48.87, or 0.65%, to 7,527.49, and the S&P 500 was down 11.99, or 0.43%, to 2,777.66.
General Electric
-0.69 (-6.98%)
Exxon Mobil
-1.57 (-1.96%)
Symbol change to WTW
-11.49 (-6.32%)
Aon plc
+6.84 (+4.35%)
Ross Stores
+0.455 (+0.48%)
Dollar Tree
+2.96 (+3.10%)
Zayo Group
+2.95 (+12.09%)
Abercrombie & Fitch
+4.7 (+22.02%)
AeroVironment
+12.98 (+16.96%)
JinkoSolar
-1.48 (-8.09%)
Nio
-2.07 (-20.45%)
United Natural Foods
-0.895 (-5.96%)