The major averages all closed at or just below all-time highs yesterday, but the recent rally that has taken stocks back up to record levels took a pause today as investors await signs that negotiations with China on a trade deal are still progressing. Weak economic data out of China did nothing to allay concerns that the trade war is weighing on the global economy.
ECONOMIC EVENTS: In the U.S., initial jobless claims rose 14,000 to 225,000 in the week ended October 9, which was a larger than expected jump. The headline Producer Prices Index rose 0.4% in October, with the core rate up 0.3%, pointing to hotter than expected inflation.
In China, industrial production growth of 4.7% in October missed the 5.4% growth forecast, retail sales growth of 7.2% fell short of the 7.8% projection, and China's fixed-asset investment increased by a less then expected 5.2% from a year earlier.
In trade news, the Financial Times reported that people close to talks between the U.S. and China claim that White House officials are frustrated that China has not offered enough concessions, while one source said that China was "absolutely" delaying the truce with its approach. Officials told the FT that while the two sides are struggling to finalize a "phase one" deal and administration officials concede that the original target date to get a deal signed may slip, they deny reports of a setback.
In Europe, the preliminary third quarter GDP report for the Eurozone was firmer than expected, with year-over-year growth of 1.2% that topped the 1.1% consensus growth forecast. Of note, Germany narrowly avoided recession with GDP growth of 0.1% in the quarter.
TOP NEWS: Shares of Walmart (WMT) slipped fractionally after the world's largest retailer's Q3 adjusted earnings beat expectations, leading to a FY19 guidance raise.
Cisco Systems (CSCO) shares fell 7.3% despite an earnings beat in the company's first fiscal quarter as the networking gear provider gave an outlook for sales growth of down 3% to down 5% year-over-year in the upcoming quarter that Citi analyst Jim Suva said is "much worse than expected."
Maxim analyst Nehal Chokshi downgraded Apple (AAPL) to Sell on Thursday, citing his belief that iPhone sales would be lower than expected in 2020. The analyst's Sell rating is somewhat rare and comes amid a wealth of more bullish recent commentary from Chokshi's peers.
American Outdoor Brands (AOBC) announced that its board has approved proceeding with a plan to break-up into two independent publicly traded companies: Smith & Wesson Brands, which would encompass the firearm business, and American Outdoor Brands, which would encompass the outdoor products and accessories business.
Meanwhile, Tesla (TSLA) shares rose almost 1% after its Model 3 and Model S sedans regained a Consumer Reports recommendation "because of improved reliability."
MAJOR MOVERS: Among the noteworthy gainers was Axonics (AXNX), which rose 13.6% after it received FDA approval of its r-SNM System. Also higher were Dillard's (DDS) and NetApp (NTAP), which gained a respective 14.2% and 3.2% after reporting quarterly results.
Among the notable losers was Ribbon Communications (RBBN), which slid 25.9% after it agreed to acquire ECI Telecom Group in a cash and stock deal and announced the departure of CEO Franklin Hobbs. Also lower were Canopy Growth (CGC) and Weibo (WB), which fell 14.4% and 17.7%, respectively, after reporting quarterly results.
INDEXES: The Dow fell 1.63, or 0.0059%, to 27,781.96, the Nasdaq lost 3.08, or 0.036%, to 8,479.02, and the S&P 500 advanced 2.59, or 0.084%, to 3,096.63.
