Stocks spent much of the day searching for direction as investors weighed the continued trade tension with China against some signs of easing on the trade front with the EU, Mexico and Canada. However, after the S&P looked like it could post a slight gain for the day and for the week, headlines from CNBC about stalling trade talks sunk the averages and cemented a down week for the benchmark average as well as the bluechip Dow.
ECONOMIC EVENTS: In the U.S., the preliminary May reading from the University of Michigan consumer sentiment survey surged 5.2 points to 102.4, hitting its highest level since January 2004. The leading economic index rose 0.2% to 112.1 in April, reaching a new historic high.
On the trade front, President Trump issued a proclamation directing the United States Trade Representative to "negotiate agreements to address the national security threat" presented by imports of automobiles and certain automobile parts, noting that if agreements are not reached within 180 days that Trump will determine whether and what further action needs to be taken. In response, Cecilia Malmstrom, the EU Commissioner in charge of trade, said that while the EU "completely rejects" the notion that its car exports are a national security threat, the EU is prepared to negotiate a limited trade agreement including cars, "but not WTO-illegal managed trade." Meanwhile, Bloomberg reported that the U.S. is set to remove steel and aluminum tariffs on Canada and Mexico in favor of stronger enforcement actions, which helps provide the pathway for USMCA ratification. Additionally, CNBC reported that trade talks between the U.S. and China appear to have stalled.
In energy news, Baker Hughes reported that the U.S. rig count is down 1 rig from last week to 987.
TOP NEWS: Shares of Nvidia (NVDA) were 2.3% lower after the chipmaker beat April quarter earnings estimates and issued better than expected July quarter guidance. However, the fact that management also pulled their previously issued annual outlook leaves near-term cloudiness in visibility and "many questions" about the expected recovery, said Cowen analyst Matthew Ramsay.
Deere (DE) fell 7.65% after the farm equipment maker reported worse than expected earnings for the second quarter and cut its fiscal year forecast, stating that "softening conditions in the agricultural sector have led Deere to adopt a more cautious financial outlook for the year."
Pinterest (PINS) shares dropped 13.6% following last night's Q1 report, which was the company's first since coming public.
After the market close last night, Tesla (TSLA) CEO Elon Musk said in a company-wide email that it would be taking "hardcore" measures to reduce spending as the company only has "approximately ten months at the first-quarter burn rate to achieve breakeven."
Meanwhile, The Information reported that CBS (CBS) made an informal offer to Lions Gate (LGF.A) to acquire cable channel Starz for around $5B over the past few weeks, but Lions Gate turned down the bid, seeking a higher valuation. Class A shares of Lions Gate closed the session 14.7% higher.
In IPO news, China's Luckin Coffee (LK) opened for trading on the Nasdaq at $25 per share after its initial public offering was priced at $17.
MAJOR MOVERS: Among the noteworthy gainers was Cray (CRAY), which surged 22.5% after it agreed to be acquired by HP Enterprise (HPE) for $35 per share in cash. HP Enterprise shares closed fractionally higher after spiking earlier in the day. Also higher was Applied Materials (AMAT), which gained 2.5% after reporting quarterly results.
Among the notable losers was Baidu (BIDU), which fell 16.5% after reporting quarterly results.
INDEXES: The Dow fell 98.68, or 0.38%, to 25,764.00, the Nasdaq lost 81.76, or 1.04%, to 7,816.28, and the S&P 500 declined 16.22, or 0.55%, to 2,860.10.
Tesla
-17.33 (-7.58%)
Nvidia
-6.48 (-3.98%)
Deere
-10.98 (-7.52%)
+0.67 (+2.58%)
Use VIAC, VIACA
-0.2 (-0.41%)
Lionsgate
+1.99 (+14.62%)
Lionsgate
+1.66 (+12.77%)
Use LKNCY
+ (+0.00%)
Cray
+6.75 (+22.65%)
HP Enterprise
+0.075 (+0.52%)
Applied Materials
-1.63 (-3.68%)
Baidu
-10.665 (-7.70%)