MARKET SNAPSHOT: Stock Market Struggles For Direction On Track For Weekly Losses
Dow hobbled by Nike drop after Foot Locker earnings
U.S. stock-index benchmarks switched between Friday, following a brief bump as President Donald Trump's strategist Stephen Bannon departed the White House, as the market attempted to recoup some of the prior day's selloff that was partially fueled by a terrorist attack in Barcelona and rumors that Trump's economic adviser might resign.
The Dow Jones Industrial Average traded down 20 points at 21,731, but had been down by as much as 110 points, with the biggest drag being shares of Nike Inc.(NKE), which fell 4.7%.
The S&P 500 index gained 1 point at 2,431, with a 0.7% rise in the energy sector and a 0.2% climbs in the tech and financial sectors keeping afloat the broad-market gauge.
The tech-laden Nasdaq Composite Index added 9 points, or 0.2%, at 6,231. Gains in shares of chip-equipment supplier Applied Materials Inc.(AMAT), up 2.9%, were partially helping to buoy the Nasdaq's move somewhat after the company reported better-than-expected quarterly results.
Stocks had a brief surge (http://www.marketwatch.com/story/us-stocks-rise-to-session-highs-after-report-of-likely-bannon-ouster-2017-08-18) following a New York Times report that Bannon, a key adviser to President Trump, would be dismissed, which the White House later confirmed (http://www.marketwatch.com/story/stephen-bannon-being-removed-from-white-house-reports-2017-08-18). Earlier, traders cited a report from Axios (https://www.axios.com/white-house-review-nears-end-officials-expect-bannon-firing-2474443198.html) saying that Bannon's potential ouster could be a reason for the reversal. Bannon is considered a controversial figure in the White House, and is viewed as one of the main contributors to the president's combative rhetoric discussing a white-supremacist rally over the weekend that resulted in one fatality.
"The news of the day around the While House has no long term impact," said Paul Nolte, portfolio manager at Kingsview Asset management, in an interview. Nolte doesn't even see a lot of relevance in the breakup of the president's economic advisory councils, noting that councils of past presidents never really produce much.
What matters to markets is whether policy comes out of the White House and economic growth rates, Nolte said.
"I don't know how Bannon leaving is good for the $18 trillion U.S. economy but we are in a bit of news vacuum right now. If someone is banging a drum in the corner of the room, then we're going to look at the drum," said Mike Antonelli, equity sales trader at Robert W. Baird & Co, referring to the seasonally lightly traded August period.
The market had also been spooked by reports on Thursday that Gary Cohn was planning to resign as an economic adviser to the president. The White House has countered those rumors.
See:Team Trump losing Gary Cohn could crash the stock market, warns Yale professor (http://www.marketwatch.com/story/team-trump-losing-gary-cohn-could-crash-the-stock-market-warns-yale-professor-2017-08-17)
Cohn is "seen as the glue holding Trump's pro-business agenda together," Deutsche Bank's strategists said. "The fears are that if he goes, you take a further step back from tax cuts and deregulation."
The move in stocks comes after one of the sharpest downturns of 2017, when the S&P 500 index slumped 1.5% for its biggest one-day percentage drop in three months. The Dow average and Nasdaq Composite Index ended down 1.2% and 1.9%, respectively.
The benchmarks are now on track for weekly losses. The Dow is on pace for its largest two-week percentage decline since mid-September last year, while the Nasdaq is flirting with its longest weekly losing streak since May 2016, as it has fallen for four weeks in a row.
Trading on Friday also comes against the backdrop of a terror attack in Spain, which happened on Thursday, with a van plowing into crowds in one of Barcelona's busiest venues, killing at least 14 people and injuring scores. Islamic State has claimed responsibility (http://www.marketwatch.com/story/islamic-state-takes-credit-for-deadly-barcelona-attack-on-pedestrians-2017-08-17) for the terror attack. Hours after the Barcelona incident, police killed five alleged terrorists following a separate attack that hurt seven people in Cambrils, a Spanish town southwest of Barcelona.
European stocks settled lower on Friday following the attacks. Spain's IBEX 35 index was among the hardest hit, down 0.6% at 10,385.70.
Stock movers: Shares in Ross Stores Inc.(ROST) rallied 9.7% after the off-price retailer late Thursday reported earnings and sales above forecasts (http://www.marketwatch.com/story/ross-stores-shares-rally-as-q2-earnings-top-views-company-forecasts-sales-growth-2017-08-17).
Calpine Corp.(CPN) soared 10% in premarket trade after a Wall Street Journal report late Thursday said Energy Capital Partners is closing in on a $17 billion deal (http://www.marketwatch.com/story/energy-capital-partners-nears-17-billion-deal-to-buy-calpine-report-2017-08-17) to acquire the power company.
U.S.-listed shares of Infosys Ltd.(500209.BY) slid 7.6% after Vishal Sikka on Friday resigned as chief executive (http://www.marketwatch.com/story/infosys-ceo-resigns-citing-resistance-to-change-2017-08-18).
Foot Locker Inc. (FL) plunged 27% after the sports-apparel company significantly missed profit forecasts (http://www.marketwatch.com/story/foot-locker-shares-tumble-15-after-profit-and-sales-fall-short-of-estimates-2017-08-18). Along with shares of Nike falling after Foot Locker's results, shares of Under Armour (http://www.marketwatch.com/story/foot-lockers-stock-plunge-drags-under-armour-and-nike-down-with-it-2017-08-18)(UAA) also dropped 4.2%.
Deere & Co.(DE) opened at a three-month low, with shares down 5.8% after quarterly sales at the farming-equipment company missed expectations (http://www.marketwatch.com/story/deeres-stock-drops-after-sales-miss-offsets-profit-beat-2017-08-18).
On an upbeat note in Friday's earnings, Estée Lauder Cos.(EL) climbed 7.5%. Both earnings and profit at the beauty company beat estimates (http://www.marketwatch.com/story/estee-lauder-shares-rise-nearly-5-after-earnings-beat-2017-08-18).
Economic news: The market ignored a reading of consumer sentiment for August that was its highest since January at 97.6, compared with 93.4 in the prior month.
On the Federal Reserve front, Dallas Fed President Robert Kaplan was set to speak at a community college event in Dallas late morning.
Other markets:Asia markets closed broadly lower (http://www.marketwatch.com/story/nikkei-slumps-to-3-month-low-as-asian-markets-dip-2017-08-17), with Japan's Nikkei 225 index finishing at a three-month low.
Oil prices (http://www.marketwatch.com/story/oil-edges-higher-as-traders-weigh-output-weaker-dollar-2017-08-18) traded 2.9% higher on Friday, rising to $48.47 a barrel. Metals were higher across the board, as gold (http://www.marketwatch.com/story/gold-retakes-1300-level-for-first-time-in-9-months-2017-08-18) settled down less than 0.1% at $1,291.60 an ounce after rising briefly above $1,300 an ounce on increased haven demand. The 10-year Treasury note was at 2.20%, while the dollar was trading lower on Friday. The ICE Dollar Index was down 0.2% at 93.49.
--Sara Sjolin in London contributed to this article.
(END) Dow Jones Newswires
August 18, 2017 14:31 ET (18:31 GMT)