Stocks began the day sharply higher but saw their best levels shortly after the open. The early strength was attributed to the market’s oversold condition, reports the U.S. and China were talking trade, and the slightly warm but not too hot consumer prices report. The market was unable to gather any upside momentum and the averages had turned negative before long. The indexes were under pressure from the “FAANG” stocks as Apple (AAPL) was pushed into bear market territory and Netflix (NFLX) has now fallen 30% from its July highs. Oil prices rallied 1% after the commodity lost over 7% yesterday, snapping a record 12-session losing streak for WTI .
ECONOMIC EVENTS: In the U.S., the consumer prices index rose 0.3% in October, with the core rate up 0.2%, both of which matched consensus estimates. In China, October data was mixed, with retail sales falling short but industrial production and fixed asset investment both better than expected. In Europe, German GDP growth wound up being a bit softer than planned at a 0.2% decline in Q3 versus the consensus call for a decline of 0.1%. In the U.K., Prime Minister Theresa May said that her cabinet is supporting her Brexit withdrawal plan. At a press conference on the matter, May said that "there will be difficulty days ahead" and added that she expects "intense scrutiny" of the plan. The PM also said that the Brexit decision was a collective one and that it is in the best interest of the entire United Kingdom.
COMPANY NEWS: Shares of Macy's (M) closed about 7% lower despite the fact that the company's third quarter earnings beat expectations and the retailer raised its full-year profit forecast. Macy's said its higher sales and earnings were driven by strong digital and continued improvement from brick & mortar.
PG&E (PCG) said in a regulatory filing that it has drawn its entire $3.3B credit revolver, which Citi analyst Praful Mehta thinks is driven by concern around a downgrade to a non-investment grade credit rating and the liquidity requirements as a result of such an action. PG&E also said that while the cause of the Camp Fire is still under investigation, "if the utility's equipment is determined to be the cause, the utility could be subject to significant liability in excess of insurance coverage." PG&E shares fell another 21% today, meaning the stock has lost about half its value over the last five days.
Canopy Growth (CGC) and Tilray (TLRY) were in focus following their first earnings reports after Canada legalized recreational cannabis. Tilray CEO Brendan Kennedy said the company's increase in revenue this quarter is from medical use, not adult use, adding that he expects to see Canadian adult use revenue next quarter following Canada's legalization of cannabis in October.
MAJOR MOVERS: Among the noteworthy gainers was Tahoe Resources (TAHO), which surged 49% after it agreed to be acquired by Pan American Silver (PAAS) for $3.40 per share. Pan American Silver dropped 10% after the announcement. Also higher was Canada Goose Holdings (GOOS), which gained 10% after reporting quarterly results.
Among the notable losers was Sangamo (SGMO), which slid 12% after JPMorgan analyst Eric Joseph downgraded the stock to Neutral from Overweight on "growing skepticism" about the company's lead development programs. Also lower was Switch (SWCH), which fell 24% after reporting quarterly results.
INDEXES: The Dow fell 205.99, or 0.81%, to 25,080.50 , the Nasdaq lost 64.48, or 0.9%, to 7,136.39 , and the S&P 500 declined 20.60, or 0.76%, to 2,701.58.
