Dow falls after Commerce Secretary says US, China still far away on trade deal

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, Jan. 2, 2019.

Michael Nagle | Bloomberg | Getty Images

Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Wednesday, Jan. 2, 2019.

“This clearly remains the largest unresolved geopolitical force for the US equity market,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note. “Most of the market moves this week were driven by competing headlines regarding the US/China trade dispute.”

Solid earnings reports helped lessen the blow from Ross’ comments on Thursday. American Airlines and JetBlue were among the companies that posted better-than-expected earnings. Texas Instruments also topped estimates.

American Airlines and JetBlue both rose more than 5 percent. Texas Instruments surged 6.9 percent.

The earnings season continues later on Thursday, with Intel and Starbucks among the companies scheduled to report after the close.

“We are early in the fourth-quarter reporting season. Results are coming, early on, largely as expected. We’re still continuing to see reasonable revenue growth and double-digit earnings growth,” said Bill Northey, senior investment director at U.S. Bank Wealth Management. But “there has been a notable erosion to 2019 full-year estimates. That’s consistent with the growing, but slowing, thesis in economic growth.”

Investors also kept an eye on Washington as the U.S. government shutdown entered its 34th straight day.

House Speaker Nancy Pelosi said Wednesday that Democrats would block President Donald Trump from delivering his State of the Union address until the government reopened — an announcement that Trump complied with.

James Gorman, CEO at Morgan Stanley, said it will be “extremely negative” for the U.S. if the shutdown continues for much longer. “If it goes on through months of this year, it’s going to have an extremely damaging effect” on the U.S. economy, he said.

For now, the U.S. labor market appears to be holding up well. Weekly jobless claims fell to 199,000 last week, their lowest in 49 years.

—CNBC’s
Alexandra Gibbs
contributed to this report.

Source: CNBC