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Wall St. heads for lower open as trade talks, retailers disappoint

Kitco News

(Reuters) - U.S. stocks were set to open lower on Thursday after a solid four-day rally, as lack of details on U.S.-China trade talks and disappointing holiday-season reports from retailers weighed on the mood.

Beijing said the talks with Washington were extensive and helped establish a foundation for resolution, but gave no details at the end of their three-day meeting aimed at resolving a tariff dispute that has battered financial markets.

Oil prices also edged lower on lack of any clear resolution from the talks, while weak factory-gate inflation data from China and worse-than-expected industrial figures in France rekindled worries about global growth.

“Right now, the market is down given there is a lack of positive news and the fact that nothing clear came out (of trade talks) doesn’t necessarily help,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

“Investors are thinking if they want a risk-on ahead of earnings season.”

Shares of Kohl’s Corp (KSS.N) fell 9.1 percent in premarket trading after reporting anemic comparable sales growth during the final two months of 2018, and Macy’s Inc (M.N) slumped 18.5 percent after cutting same-store sales forecast for the holiday quarter.

Target Corp (TGT.N) dropped 3.7 percent as it maintained full-year earnings forecast. Nordstrom Inc (JWN.N) declined 8.7 percent, while Walmart Inc (WMT.N) was off 1.5 percent.

Technology stocks that had led the recent surge were also lower. Apple Inc (AAPL.O) and Microsoft Corp (MSFT.O) shed 0.8 percent, while Amazon.com Inc (AMZN.O) declined 0.8 percent.

At 8:45 a.m. ET, Dow e-minis 1YMc1 were down 80 points, or 0.34 percent. S&P 500 e-minis ESc1 were down 13 points, or 0.50 percent and Nasdaq 100 e-minis NQc1 were down 40.5 points, or 0.61 percent.

The retreat came after the S&P 500's .SPX four-day rally, its longest in nearly four months, took the benchmark index more than 10 percent above the 20-month lows hit around Christmas.

Those gains were on hopes of a trade deal, strong U.S. jobs data and recent indications that the U.S. Federal Reserve is in no rush to raise interest rates.

Minutes from the Fed’s most recent meeting, released on Wednesday, showed policymakers want to be patient. Investors will tune into Fed Chair Jerome Powell’s speech before the Economic Club of Washington to see if the same tone continues.

American Airlines Group Inc (AAL.O) fell 7.7 percent after the No.1 U.S. airline cut its forecast for fourth-quarter growth in unit revenue, a closely watched performance metric. That weighed on other airlines as well.

Among the bright spots, Ford (F.N) rose 0.3 percent after announcing thousands of job cuts, plans to exit unprofitable markets and discontinue loss-making vehicle lines as part of a turnaround effort in Europe.

One retailer trading higher was Bed Bath & Beyond Inc (BBBY.O), which jumped 10.7 percent after the home furnishing company reported a better-than-expected quarterly profit and gave upbeat earnings forecast.

Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta

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