It was another when even the marvelous Q2 couldn’t keep away trade jitters as China introduced new tariffs on U.S. goods and dropped the Dow modestly down 45 points, being led by the China-heavy U.S. exporters Boeing and Caterpillar. Crude also dropped almost a full percent on the same worries.  But now with nearly 90 percent of S&P companies reporting and almost 80 percent of those beating forecasts, Q2 is still buffering the market from all the other bad news.  Since it is reasonable to assume that China thinks it’ll get a better trade deal if the Democrats take back the House in November, there’s no reason to think they’ll deal now so we’re stuck with these tensions at least until then.  Volume was a little below average at 5.9 billion. 

wed  AUGUST 8, 2018 / 4:45 pm 

S&P 500, Dow edge down as oil prices, trade worries weigh

Stephen Culp

DJ:  25,583.75  -45.16         NAS:  7,888.33  +4.66         S&P:  2,857.70  -0.75        8/8

NEW YORK (Reuters) - The S&P 500 closed slightly lower on Wednesday as falling crude prices and trade jitters held markets in check.  The Nasdaq posted its seventh consecutive daily advance, while the Dow was down marginally. The S&P 500’s dip occurred as the index has inched closer in recent days to its record high set on Jan. 26.

“We had in January the fastest 10 percent decline from an all-time high in history,” said Robert Phipps, director at Per Stirling in Austin, Texas. “When you have substantial declines, particularly off of previous highs, you normally will see periods of digestion.”

China introduced new 25 percent tariffs on $16 billion worth of goods imported from the United States in the latest tit-for-tat in the escalating trade dispute between the world’s two largest economies.   “This is going to continue at least until the midterm elections” in November, Phipps said. “Why would (China) negotiate with the U.S. now when they may get a mixed government to negotiate with after November?”  Trade-sensitive industrial companies .SPLRCI were the biggest drag on the Dow. The decline was led by Boeing (BA.N) and Caterpillar Inc (CAT.N).

Energy stocks .SPNY fell 0.8 percent as crude prices LCOc1 dropped due to slowing Chinese demand and trade concerns.  Technology .SPLRCT provided the largest boost to the S&P 500, led by Microsoft Corp (MSFT.O), Facebook Inc (FB.O) and Alphabet Inc (GOOGL.O).  Shares of Tesla Inc (TSLA.O) fell 2.4 percent as its board evaluated Elon Musk’s idea of taking the electric automaker private, a day after the chief executive surprised the market by floating the proposal on Twitter.

The Dow Jones Industrial Average .DJI fell 45.16 points, or 0.18 percent, to 25,583.75, the S&P 500 .SPX lost 0.75 point, or 0.03 percent, to 2,857.70 and the Nasdaq Composite .IXIC added 4.66 points, or 0.06 percent, to 7,888.33. 

Second-quarter earnings season has entered the home stretch, and of the 440 companies in the S&P 500 that have reported so far, 78.6 percent have beaten analyst expectations, according to Thomson Reuters I/B/E/S.

Walt Disney Co (DIS.N) dropped 2.2 percent after its quarterly profit missed estimates, and after a source reported that China has denied the company’s request to screen its film “Christopher Robin” in the country.  Shares of Twenty-First Century Fox Inc (FOXA.O) were slightly up in choppy post-market trading after posting better-than-expected results.

Among gainers, CVS Health Corp (CVS.N) beat analyst estimates and announced it now expects its acquisition of Aetna (AET.N) to close in the latter half of 2018. The drugstore operator’s shares rose 4.2 percent.  Drugmaker Mylan NV (MYL.O) recovered from earlier losses after it said it was actively evaluating a “wide range of alternatives” following a disappointing earnings report. The stock ended the session up 1.8 percent.  Michael Kors Holdings Ltd (KORS.N) gained 6.7 percent after beating analyst profit forecasts and raising its full-year forecast. 

Declining issues outnumbered advancing ones on the NYSE by a 1.22-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favored advancers.  The S&P 500 posted 23 new 52-week highs and three new lows; the Nasdaq Composite recorded 80 new highs and 77 new lows.

Volume on U.S. exchanges was 5.95 billion shares, compared to the 6.31 billion average over the last 20 trading days.