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MARKET SNAPSHOT: Dow Logs First Back-to-back Loss In June As Investors Focus On U.S.-China Trade

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06/12/2019 | 04:38pm EDT

By Chris Matthews and William Watts, MarketWatch

Facebook sinks 1.7% on reports Zuckerberg knew of data breaches

The Dow Jones Industrial Average finished lower for a second day in a row as investors digested a reading on May consumer inflation and continued to eye the U.S.-China trade fight.

How did benchmarks perform?

The Dow Jones Industrial Average ended down 43.68 points, or 0.2%, at 26,004.83, marking its first back-to-back loss this month, while the S&P 500 index lost 5.88 points, or 0.2%, to finish at 2,879.84. The Nasdaq Composite Index fell 29.85 points, or 0.4%, to 7,792.72.

The Dow is on pace for a slight weekly gain of 0.1%, the S&P 500 is on track for a 0.2% rise, and the Nasdaq is looking at a 0.7% weekly climb.

What drove the market?

Tariffs remain the focus for Wall Street. Responding to reporter questions in the Rose Garden on Wednesday President Donald Trump said he didn't have a deadline for imposing additional tariffs on Chinese. "My deadline is all up here," he said, pointing to his head.

Trump Today:President says there's no deadline for imposing China tariffs

On Tuesday, Trump said he was the one "holding up" a trade deal with China, saying the two countries would "either do a great deal...or we're not doing a deal at all."

Analysts blamed the remarks for casting a somewhat negative tone over global equities.

Data early Wednesday showed that U.S. price inflation remains tame, according to the Labor Department's consumer-price index , which indicated that prices rising 0.1% in April, in line with the consensus forecast, according to a MarketWatch poll of economists.

The increase in the cost of living over the past 12 months also slowed to 1.8% from 2%. When eliminating volatile food and energy prices, inflation fell from 2.1% annually to 2%.

Though the measure isn't as closely followed by the Federal Reserve as the personal-consumption expenditures index, this latest evidence that price growth is slowing could support investors belief that the Federal Reserve will cut interest rates sooner than later.

What companies were in focus?

Shares of electric car maker Tesla fell 3.6%, shedding an earlier gain scored after Chief Executive Elon Musk late Tuesday took the stage at the company's shareholder meeting and denied the company was facing demand and production problems .

In deal news, France's Dassault Systems SE said it reached an agreement to acquire U.S. technology group Medidata Solutions in an agreement valued at $5.8 billion. Dassault will offer $92.25 a share for Medidata in an all-cash deal. Medidata shares fell 3.6% Wednesday at $90.75 a share.

Shares of Mattel rose 5.3% Wednesday, after reports the toy company turned down a merger offer from MGA Entertainment Inc. It also announced it has extended its licensing agreement with Warner Bros.

Shares of Dave & Buster's Entertainment Inc. (PLAY)tumbled 21.4% Monday, after the operator of entertainment and dining venues reported Tuesday evening first-quarter sales and earnings that fell short of Wall Street expectations.

Neptune Wellness Solutions announced a three-year sourcing agreement with cannabis company Green Organic Dutchman Holdings Ltd. Neptune shares rose 5.4% Wednesday.

Salesforcesaid Wednesday that a recently announced acquisition of Tableau Software would reduce 2020 earnings less than initially assumed. Salesforce shares rose 0.8% Wednesday, while Tableau's stock gained 0.9%.

Shares of Cisco Systems fell 2.2% Wednesday, after William Blair analyst Jason Ader cut his rating on the stock to market perform from outperform.

Shares of Facebook ended 1.7% lower after The Wall Street Journal reported (https://www.wsj.com/articles/facebook-worries-emails-could-show-zuckerberg-knew-of-questionable-privacy-practices-11560353829?mod=mktw) that the company uncovered emails that appeared to connect Chief Executive Mark Zuckerberg to potentially problematic privacy practices.

What did analysts say?

"This morning's inflation data adds more fuel to the rate cut fire and increasingly supports the Fed's dovish stance,' wrote Mike Loewengart, v.p. of investment strategy at E-Trade Financial, in an email.

"We could likely see the markets react well to this news," he added. "While we are experiencing pockets of weakness on the jobs front, the big takeaway for investors today is that economic fundamentals are still quite strong and there continues to be reasons to be optimistic about the state of our economy--sure growth is slowing, but that does not mean its shrinking."

"President Trump has defended his use of levies, and the threat of higher levies, as a way of trying to rebalance the trading relationship with China. Beijing have reiterated their willingness to hold a firm line against the U.S. The standoff is back at the forefront of dealers' minds and it has prompted some investors to take some money off the table," said David Madden, market analyst at CMC Markets UK, in a note.

How did other markets trade?

The yield on the 10-year U.S. Treasury note retreated one basis point to 2.129%.

Asian markets traded down Wednesday , with Japan's Nikkei 225 losing 0.4%, China's Shanghai Composite index sliding 0.6%, and Hong Kong's Hang Seng Index retreating 1.7%, amid civil unrest in the semiautonomous territory. European stocks were also trading lower, as evidenced by the 0.3% decline in the Stoxx Europe

In commodities markets, the price of crude oil settled at around a 5-month low, while gold ended 0.4% higher. The U.S. dollar , meanwhile, edged higher against its peers.

Stocks mentioned in the article
ChangeLast1st jan.
CHINA-SHANGHAI COMP -0.19% 2976.28 End-of-day quote.19.15%
CISCO SYSTEMS 0.93% 56.6 Delayed Quote.29.43%
DAVE & BUSTER'S ENTERTAINMENT INC 0.23% 39.22 Delayed Quote.-11.98%
DJ INDUSTRIAL -0.04% 26536.82 Delayed Quote.13.76%
FACEBOOK -0.62% 187.66 Delayed Quote.43.15%
HANG SENG 0.24% 28215.09 Real-time Quote.9.17%
MATTEL 1.73% 10.61 Delayed Quote.6.21%
MEDIDATA SOLUTIONS INC -0.39% 90.35 Delayed Quote.34.01%
NASDAQ 100 0.47% 7627.05087 Delayed Quote.19.93%
NASDAQ COMP. 0.32% 7909.971271 Delayed Quote.18.83%
NEPTUNE WELLNESS SOLUTIONS INC -1.05% 5.67 Delayed Quote.65.61%
NIKKEI 225 -0.42% 21086.59 Real-time Quote.5.80%
S&P 500 -0.12% 2913.78 Delayed Quote.16.38%
SALESFORCE.COM -0.20% 149.04 Delayed Quote.8.81%
TABLEAU SOFTWARE INC -0.39% 162.1 Delayed Quote.35.08%
TESLA INC. -0.22% 219.27 Delayed Quote.-34.11%
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