By Joseph Adinolfi and Wallace Witkowski, MarketWatch
Target, Kohls, Wal-Mart and J.C. Penney tumble
The Dow industrials on Wednesday closed at the lowest level of 2017, marking a fourth straight day in the red for the blue-chip gauge, but the broader stock market managed modest gains.
The Dow Jones Industrial Average traded within a 89-point range, and finished down 22.05 points, or 0.1%, at 19,804.72, its lowest close of 2017. Shares of Dow component UnitedHealth Group Inc.(UNH), off 1.8%, and Exxon Mobil Corp. (XOM), down 1.2%, offset roughly 1% gains in American Express Co.(AXP) and Travelers Cos. Inc.(TRV).The S&P 500 index , closed up 4 points, or 0.2%, at 2,271.89, with a downdraft in telecom shares capping gains in the banking sector. Shares of Morgan Stanley(MS)Bank of America Corp.(BAC), and J.P. Morgan Chase & Co. (JPM) all closed higher.
However, some of the most prominent financial names reporting quarterly results Wednesday ended lower, with Goldman Sachs Group Inc. (GS) finishing off 0.6 % after the investment bank reported stronger-than-expected quarterly earnings. Citigroup Inc. (C) finished 1.7% lower after reporting quarterly revenues that were slightly weaker than expected.
Financial stocks have led a torrid postelection rally that took the Dow within a hair's breadth of psychologically milestone of 20,000. But they have stalled along with the rest of the equity market.
Meanwhile, the Nasdaq Composite Index finished up 16.93 points, or 0.3%, at 5,555.65.
Wall Street trading over the past several days has been subdued as investors await signs that the stock-market rally that followed President-elect Donald Trump's November election victory, supported by his campaign promises to increase fiscal spending, cut taxes and roll back regulations, is based in reality and underpinned by solid corporate quarterly results.
Mike Antonelli, an equity sales trader at R.W. Baird & Co., said global stocks would likely remain placid until investors have a better picture of the fourth-quarter earnings environment and companies' outlooks for 2017, as well as Trump's plans. Trump will be sworn in to office on Friday.
The bulk of S&P 500 firms will release their earnings in the coming weeks.
Retail shares have been in focus in recent weeks, suffering on reports of tepid holiday sales. On Wednesday that trend continued, with Target Corp. (TGT) shares closing down 5.8% after the retailer warned that its fourth-quarter earnings (http://www.marketwatch.com/story/target-issues-profit-warning-on-weak-holiday-sales-2017-01-18) would be weaker than previously anticipated after a tough holiday season. That news sparked a selloff that spread throughout the sector.
"The story coming out of retail hasn't been good," said Mohannad Aama, managing director at Beam Capital Asset Management, adding that "individual stories" will likely continue to influence the broader sector.
On Wednesday, the dollar recovered from Trump's comments on Tuesday, who said a strong dollar can harm the U.S. economy. The U.S. Dollar index rose 0.9% to 101.26. The index fell 0.9% Tuesday, but added to its rebound after Fed Chairwoman Janet Yellen said she expects rate hikes a few times a year (http://www.marketwatch.com/story/feds-yellen-says-she-expects-rates-to-rise-a-few-times-a-year-until-end-of-2019-2017-01-18) until the end of 2019.
Read:Trump is waving adios to the longstanding 'strong-dollar policy' (http://www.marketwatch.com/story/trump-is-waving-adios-to-the-longstanding-strong-dollar-policy-2017-01-17)
Economic docket: On the economic front, the consumer-price index, a widely watched gauge of inflationary pressure, showed price growth accelerated in 2016 at the fastest pace since 2011 (http://www.marketwatch.com/story/inflation-climbs-in-2016-at-fastest-pace-in-5-years-cpi-shows-2017-01-18).
In December, the index rose 0.3%. Excluding the volatile food and energy categories, prices rose 0.2%. The reading was in line with investor expectations and had little impact on stock futures.
U.S. industrial output accelerated last month at its strongest pace in two years.
The housing-market index from the National Association of Homebuilders showed that builder sentiment slipped in January after notching its highest reading of the business cycle in December (http://www.marketwatch.com/story/home-builder-sentiment-slips-in-january-as-election-elation-eases-up-nahb-says-2017-01-18). Despite the drop, the January number was the second-highest reading of the cycle.
Inflation appears to be heating up, according to the Federal Reserve's so-called Beige Book, (http://www.marketwatch.com/story/feds-beige-book-price-pressures-intensified-at-end-of-last-year-2017-01-18) which found that eight out of 12 Fed districts saw modest price increases. Underscoring retail woes, the report said that retailers struggled to raise prices.
Read: How long postelection rallies last after Inauguration Day--in one chart (http://www.marketwatch.com/story/how-long-post-election-rallies-last-after-inauguration-day-in-one-sp-chart-2017-01-13)
Stock movers:Mallinckrodt PLC(MNK) shares finished down 8% following a report that the Federal Trade Commission was filing charges against the Irish drugmaker for jacking up drug prices (http://www.marketwatch.com/story/ftc-set-to-file-suit-against-mallinckrodt-for-using-monopoly-to-jack-up-drug-prices-2017-01-18). In a statement, Mallinckrodt said they had entered into a settlement agreement with the FTC to settle the matter.
Transportation shares were constrained after railroad operator CSX Corp.(CSX)posted disappointing quarterly earnings (http://www.marketwatch.com/story/csx-corp-misses-q4-earnings-but-sales-come-in-above-expectations-2017-01-17). CSX shares fell 3.2% while the Dow Jones Transportation Average managed a 0.5% gain.
Qualcomm Inc.(QCOM) shares rebounded 1.5% Wednesday after the FTC filed a monopoly complaint against the chip maker, spurring a 4% drop on Tuesday. See: Qualcomm licensing business, Apple deal attacked in FTC's antitrust lawsuit (http://www.marketwatch.com/story/qualcomm-licensing-business-apple-deal-attacked-in-ftcs-antitrust-lawsuit-2017-01-17).
Shares of Cameco Corp.(CCO.T) fell 18% after the uranium miner said it would cut 10% of its workforce and warned on earnings (http://www.marketwatch.com/story/cameco-shares-drop-on-profit-warning-layoffs-2017-01-17) due to a continued weak market.
Apollo Global Management LLC(APO) is prepping Chuck E. Cheese for an initial public offering (http://www.marketwatch.com/story/chuck-e-cheese-prepped-for-ipo-report-2017-01-17) that values the restaurant chain at more than $1 billion, Reuters reported. Apollo shares finished up 0.8%.
Other markets: European markets finished slightly higher while the FTSE 100 index finished lower, after logging its worst loss in six months on Tuesday after Prime Minister Theresa May confirmed the U.K. will exit the European Union's single market.
The British pound moved lower against the dollar, trading at $1.2261 from $1.2414 late Tuesday.
See: 'Textbook short squeeze' for the pound--analysts assess May's Brexit plans (http://www.marketwatch.com/story/textbook-short-squeeze-for-the-pound-analysts-assess-mays-brexit-plans-2017-01-17)
Asian stocksfinished mostly higher (http://www.marketwatch.com/story/asian-stocks-mixed-as-investors-warily-await-trump-2017-01-17), with the Nikkei 225 index rising 0.4%, lifted by a stronger Japanese yen.
Oil prices (http://www.marketwatch.com/story/oil-prices-edge-up-on-production-cut-optimism-2017-01-18) settled down 2.7% at $51.08 a barrel, while gold (http://www.marketwatch.com/story/gold-eases-a-touch-from-2-month-high-as-dollar-steadies-2017-01-18) finished off less than 0.1% at $1,212.10 an ounce after settling at a two-month high Tuesday on a weaker dollar and Brexit jitters.
--Barbara Kollmeyer in Madrid contributed to this article
(END) Dow Jones Newswires
January 18, 2017 17:16 ET (22:16 GMT)
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