Stocks fell into Wednesday's session, as uncertainty continued over the U.S. trade dust-up with China. In addition, retailers reporting earnings — Tiffany (TIF), Urban Outfitters (URBN), Lowe's (LOW) and Target (TGT) — were a driving force in U.S. premarket trading.
XThe Nasdaq Composite dumped 0.6% at the starting bell. Xilinx (XLNX) took the Nasdaq 100's hardest early hit. Ctrip.com International (CTRP) leapt 5% to lead the list. On the S&P 500, Tiffany and Lowe's led, while Hewlett Packard Enterprise (HPE) and Target suffered the index's worst declines. The S&P 500 opened down 0.5%.
The Dow Jones industrial average slumped 0.5%, with a third of its stocks falling more than 1% at the open. General Electric (GE) and Caterpillar (CAT) fell furthest.
Asian stock markets posted deep losses Wednesday as investors in Japan and China responded to Tuesday's cooling of the U.S./China trade truce. In China, Hong Kong's Hang Seng Index plummeted 1.8%, its worst one-day decline since early April. The Shanghai Composite dropped 1.4%. In Japan, Tokyo's Nikkei 225 sluiced 1.2% lower. In addition, the Markit/Nikkei Japan Manufacturing Purchasing Managers Index slipped in its preliminary reading for May to 52.5, down from 53.8 in April and the lowest reading since August last year.
Europe's markets also took some hard hits in afternoon trade, and felt some impact from U.S./China trade, and as Markit's preliminary May PMI showed manufacturing slumping to an 18-month low. Frankfurt's DAX and Paris' CAC-40 fell hardest, down 1.6% and 1.3%, respectively. Markit's preliminary U.S. composite PMI is due out at 9:45 a.m. ET.
Stock Futures: Tiffany Breaks Out, Target Stumbles, Five Below, Ctrip Jump
Tiffany scorched up 14% in early stock market action. The blue box jeweler scored big earnings and revenue wins in its first-quarter results. Management raised full-year guidance above analyst views, and launched a $1 billion share-buyback initiative. The gap-up gain sent shares past a 104.46 buy point in a first-stage cup-with-handle base.
Hewlett Packard Enterprise (HPE) tumbled 7%, Intuit (INTU) slipped 0.5%, after reporting quarterly results late Tuesday. Among the deepest earnings-triggered declines, burger joint Red Robin (RRGB) tumbled 16%, while The Container Store (TCS) swooned 8%.
China-based Ctrip.com International bolted 7% higher as investment gains helped boost first quarter earnings well past analysts' expectations. The gain sent shares back above their 10-week moving average, positioning them for a test of resistance at their 40-week line, within a 10-month downtrend.
Target sliced nearly 5% lower after its first-quarter performance stopped well short of analyst expectations. The big-box retailer missed targets on both the sales and earnings lines, and growth in digital sales slowed a notch vs. the retailer's fourth-quarter pace. Second-quarter earnings guidance was above consensus views. The stock is in a four-month flat base.
Urban Outfitters popped 4% after reporting a powerful beat with its first-quarter sales and earnings. The stock had dropped 2.6% during Tuesday's regular trade. Wednesday's gain lifted shares to within 1% of their May 17 high. The stock is extended above a 36.20 buy point.
IBD 50 stock Five Below (FIVE), which did not report earnings results, sparked almost 2% higher. The stock has been battling to hold 10-week support, trading 10% below a 78.38 buy point in a third-stage flat base.
In Focus: Fed Minutes, Markit PMI, Oil Prices
The 2 p.m. ET release of minutes from the Federal Open Market Committee's May 1-2 meeting could provide a reference point for the day's trade. The Fed is widely expected to raise its target interest rate for a second time this year during its meeting on June 12-13. That would mark two of what were originally three rate hikes planned for 2018. The May minutes could provide insight on the possibility of a fourth rate hike this year, and on which inflation measures might be likely to lead to a fourth rate hike.
Crude oil prices traded moderately lower, with U.S. benchmark West Texas Intermediate down 0.6% to below $72 a barrel. American Petroleum Institute data released late Tuesday showed a slightly smaller-than-expected draw on oil stockpiles during the week. But gasoline inventories surged 980,000 barrels, vs. consensus projections for a 1.38 million barrel draw. The Energy Information Administration releases its weekly inventories data at 10:30 a.m. ET.
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