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U.S. Stocks Slip After Retail Sales Unexpectedly Fall

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10/16/2019 | 10:09am EST

By Will Horner

U.S. stocks fell Wednesday as economic data suggested consumers were holding back on spending in the face of trade tensions and a global economic slowdown.

The Dow Jones Industrial Average fell 0.1% to 27007. The S&P 500 slipped 0.2%. The Nasdaq Composite lost 0.3%. Global stocks, meanwhile, wavered as concerns lingered over Brexit talks and the prospect of a U.S.-China trade deal.

Data from the Commerce Department Wednesday showed that U.S. retail sales slipped 0.3% in September. Economists polled by The Wall Street Journal had been anticipating the data to show a 0.2% rise in sales.

Concerns about economic growth are continuing to bubble. The International Monetary Fund this week cut its global GDP forecast for 2019 to just 3%, its lowest level since the 2008 financial crisis, citing trade tensions and geopolitics. It projected 3.4% growth in 2020.

Even that might be too optimistic, Oxford Economics wrote. "We think the worst effects of the industrial and trade sector weakness is yet to pass, " the firm wrote in a note.

Despite those worries, major U.S. stock indexes remain near all-time highs. Investors will look to corporate earnings season for new drivers.

Bank of America shares rose 2.9% as the bank reported gains in its consumer, wealth and commercial businesses.

PNC Financial Services Group reported a rise in revenue that beat analysts' forecasts, pushing shares up 1.3%. Bank of New York Mellon shares rose 1.1% on stronger-than-expected earnings.

Shares of McKesson, AmerisourceBergen and Cardinal Health rallied after The Wall Street Journal reported they were in talks to settle opioid crisis litigation. Shares in McKesson rose 4%, AmerisourceBergen rose 2.1%, and Cardinal Health rose 2.6%.

IBM and Netflix will also report their third-quarter earnings after markets close in the U.S.

The pan-continental Stoxx Europe 600 index edged 0.1% lower as talks toward a draft plan for Britain to leave the European Union continued. Investors had been anticipating positive news to emerge overnight but were disappointed by a lack of progress Wednesday, said Peter Dixon, a senior economist at Commerzbank.

"We were told there would be a deadline of midnight last night; both sides sounded very positive. Then we woke up and it was still a work in progress and I think that has changed investors' perceptions of where we are," he said.

Even if a deal is reached, questions remained about whether the British Parliament will back it, others cautioned.

"It does look like there is progress but there are hurdles to get something agreed with the EU and then it will be difficult to get it through Parliament," said Christopher Peel, chief investment officer at Tavistock Investments.

The British pound, which had hit a four-month high against the U.S. dollar a day earlier, was flat while the FTSE 100 gauge for U.K. equities slipped 0.4%.

Chinese stocks edged lower on concerns that tensions with the U.S. over the Hong Kong protests would make striking a trade deal more complicated.

The Shanghai Composite Index fell 0.4% after the U.S. House of Representatives passed a series of bills backing pro-democracy protesters in Hong Kong, drawing a strong rebuke from China. A Chinese Foreign Ministry spokesman warned the U.S. against meddling in Chinese affairs and said the bill would damage relations between the two nations.

The development may complicate efforts to reach a trade agreement, analysts said.

"We got sideswiped by those headlines from China," said Stephen Innes, a market strategist for currency broker AxiTrader in Bangkok. "I'm not sure much is going to actually come from it, but it's just another thing to deal with."

Stocks mentioned in the article
ChangeLast1st jan.
AMERISOURCEBERGEN -2.36% 84.04 Delayed Quote.15.69%
BANK OF AMERICA CORPORATION -0.24% 33.18 Delayed Quote.34.98%
BANK OF NEW YORK MELLON CORPORATION (THE) -0.28% 49.06 Delayed Quote.4.23%
CARDINAL HEALTH -0.13% 53.68 Delayed Quote.20.52%
CHINA-SHANGHAI COMP -1.83% 2909.97 End-of-day quote.16.50%
COMMERZBANK AG 3.05% 5.711 Delayed Quote.-4.18%
DJ INDUSTRIAL 0.04% 27691.49 Delayed Quote.18.66%
EURO / BRITISH POUND (EUR/GBP) -0.01% 0.85835 Delayed Quote.-4.54%
FTSE 100 INDEX 0.28% 7234.11 End-of-day quote.0.00%
NASDAQ 100 -0.17% 8241.911835 Delayed Quote.30.43%
NASDAQ COMP. -0.13% 8464.276795 Delayed Quote.27.73%
NETFLIX 0.90% 294.18 Delayed Quote.9.91%
PNC FINANCIAL SERVICES GROUP 0.17% 152.46 Delayed Quote.30.41%
S&P 500 -0.20% 3087.01 Delayed Quote.23.14%
STOXX EUROPE 600 0.25% 406.34 Delayed Quote.20.07%
STOXX EUROPE 600 NR 0.25% 875.56 Delayed Quote.23.44%
WALGREENS BOOTS ALLIANCE 5.08% 62.25 Delayed Quote.-8.90%
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