By Chris Matthews and William Watts, MarketWatch
Facebook sinks 1.7% on reports Zuckerberg knew of data
breaches
The Dow Jones Industrial Average finished lower for a second day
in a row as investors digested a reading on May consumer inflation
and continued to eye the U.S.-China trade fight.
How did benchmarks perform?
The Dow Jones Industrial Average ended down 43.68 points, or
0.2%, at 26,004.83, marking its first back-to-back loss this month,
while the S&P 500 index lost 5.88 points, or 0.2%, to finish at
2,879.84. The Nasdaq Composite Index fell 29.85 points, or 0.4%, to
7,792.72.
The Dow is on pace for a slight weekly gain of 0.1%, the S&P
500 is on track for a 0.2% rise, and the Nasdaq is looking at a
0.7% weekly climb.
What drove the market?
Tariffs remain the focus for Wall Street. Responding to reporter
questions in the Rose Garden on Wednesday President Donald Trump
said he didn't have a deadline for imposing additional tariffs on
Chinese. "My deadline is all up here," he said, pointing to his
head.
Trump Today:President says there's no deadline for imposing
China tariffs
(http://www.marketwatch.com/story/trump-today-president-says-theres-no-deadline-for-imposing-china-tariffs-as-he-announces-military-deal-with-poland-2019-06-12)
On Tuesday, Trump said he was the one "holding up" a trade deal
with China,
(http://www.marketwatch.com/story/trump-i-have-no-interest-in-trade-deal-until-china-reverses-its-stance-2019-06-11)
saying the two countries would "either do a great deal...or we're
not doing a deal at all."
Analysts blamed the remarks for casting a somewhat negative tone
over global equities.
Data early Wednesday showed that U.S. price inflation remains
tame, according to the Labor Department's consumer-price index
(http://www.marketwatch.com/story/consumer-inflation-rises-01-in-may-smallest-bump-in-4-months-cpi-shows-2019-06-12),
which indicated that prices rising 0.1% in April, in line with the
consensus forecast, according to a MarketWatch poll of
economists.
The increase in the cost of living over the past 12 months also
slowed to 1.8% from 2%. When eliminating volatile food and energy
prices, inflation fell from 2.1% annually to 2%.
Though the measure isn't as closely followed by the Federal
Reserve as the personal-consumption expenditures index, this latest
evidence that price growth is slowing could support investors
belief that the Federal Reserve will cut interest rates sooner than
later.
What companies were in focus?
Shares of electric car maker Tesla Inc. (TSLA) fell 3.6%,
shedding an earlier gain scored after Chief Executive Elon Musk
late Tuesday took the stage at the company's shareholder meeting
and denied the company was facing demand and production problems
(http://www.marketwatch.com/story/elon-musk-tesla-does-not-have-a-demand-problem-2019-06-11).
In deal news, France's Dassault Systems SE said it reached an
agreement to acquire U.S. technology group Medidata Solutions
Inc.(MDSO) in an agreement valued at $5.8 billion. Dassault will
offer $92.25 a share for Medidata in an all-cash deal. Medidata
shares fell 3.6% Wednesday at $90.75 a share.
Shares of Mattel Inc. (MAT) rose 5.3% Wednesday, after reports
(http://www.marketwatch.com/story/mattel-shares-jump-5-on-reports-of-rejected-merger-offer-2019-06-12)
the toy company turned down a merger offer from MGA Entertainment
Inc. It also announced it has extended its licensing agreement with
Warner Bros.
Shares of Dave & Buster's Entertainment Inc. (PLAY)tumbled
21.4%
(http://www.marketwatch.com/story/dave-busters-stock-tanks-after-companys-quarterly-miss-lowered-guidance-2019-06-11)
Monday, after the operator of entertainment and dining venues
reported Tuesday evening first-quarter sales and earnings that fell
short of Wall Street expectations.
Neptune Wellness Solutions Inc. (NEPT.T) announced a three-year
sourcing agreement
(http://www.marketwatch.com/story/neptune-wellness-stock-soars-again-after-another-3-year-extraction-deal-with-a-cannabis-company-2019-06-12)
with cannabis company Green Organic Dutchman Holdings Ltd. Neptune
shares rose 5.4% Wednesday.
Salesforce.com Inc. (CRM)said Wednesday
(http://www.marketwatch.com/story/salesforce-corrects-earnings-expectations-around-tableau-deal-2019-06-12)
that a recently announced acquisition of Tableau Software Inc.
(DATA) would reduce 2020 earnings less than initially assumed.
Salesforce shares rose 0.8% Wednesday, while Tableau's stock gained
0.9%.
Shares of Cisco Systems Inc. (CSCO) fell 2.2% Wednesday, after
William Blair analyst Jason Ader cut his rating
(http://www.marketwatch.com/story/cisco-stock-falls-after-william-blair-downgrade-2019-06-12)
on the stock to market perform from outperform.
Shares of Facebook Inc. (FB) ended 1.7% lower after The Wall
Street Journal reported
(https://www.wsj.com/articles/facebook-worries-emails-could-show-zuckerberg-knew-of-questionable-privacy-practices-11560353829?mod=mktw)
that the company uncovered emails that appeared to connect Chief
Executive Mark Zuckerberg to potentially problematic privacy
practices.
What did analysts say?
"This morning's inflation data adds more fuel to the rate cut
fire and increasingly supports the Fed's dovish stance,' wrote Mike
Loewengart, v.p. of investment strategy at E-Trade Financial, in an
email.
Read:Stock-market and bond investors disagree about trade wars
-- why both may be wrong
(http://www.marketwatch.com/story/why-stock-market-investors-and-bond-traders-are-both-wrong-about-trade-wars-2019-06-12)
"We could likely see the markets react well to this news," he
added. "While we are experiencing pockets of weakness on the jobs
front, the big takeaway for investors today is that economic
fundamentals are still quite strong and there continues to be
reasons to be optimistic about the state of our economy--sure
growth is slowing, but that does not mean its shrinking."
"President Trump has defended his use of levies, and the threat
of higher levies, as a way of trying to rebalance the trading
relationship with China. Beijing have reiterated their willingness
to hold a firm line against the U.S. The standoff is back at the
forefront of dealers' minds and it has prompted some investors to
take some money off the table," said David Madden, market analyst
at CMC Markets UK, in a note.
How did other markets trade?
The yield on the 10-year U.S. Treasury note
(http://www.marketwatch.com/story/treasury-yields-extend-decline-after-may-cpi-data-2019-06-12)
retreated one basis point to 2.129%.
Asian markets traded down Wednesday
(http://www.marketwatch.com/story/asian-markets-retreat-hang-seng-sinks-amid-hong-kong-protests-2019-06-11),
with Japan's Nikkei 225 losing 0.4%, China's Shanghai Composite
index sliding 0.6%, and Hong Kong's Hang Seng Index retreating
1.7%, amid civil unrest in the semiautonomous territory. European
stocks were also trading lower, as evidenced by the 0.3% decline in
the Stoxx Europe
In commodities markets, the price of crude
(http://www.marketwatch.com/story/crude-prices-slide-on-signs-of-rising-us-inventories-2019-06-12)
oil settled at around a 5-month low, while gold
(http://www.marketwatch.com/story/gold-renews-climb-spurred-on-by-weaker-stocks-and-worrisome-geopolitical-headlines-2019-06-12)
ended 0.4% higher. The U.S. dollar , meanwhile, edged higher
against its peers.
(END) Dow Jones Newswires
June 12, 2019 16:37 ET (20:37 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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