The United States could end up with no growth this quarter if the partial government shutdown that began on December 22 extended through March, White House economic adviser Kevin Hassett said, though he did not see the risk of a credit downgrade. That added to nerves, with investors already fretting after the International Monetary Fund on Monday trimmed its 2019 global growth estimates and China reported its slowest economic growth in 28 years, partly due to the Sino-US trade war.
Companies gathered at the World Economic Forum in Davos, Switzerland, said they are worried the trade war will dampen the global economy and business investments even further. As much as Trump wants to boost markets through a pact, he will not soften his position that China must make real structural reforms, including how it handles intellectual property, to reach a deal, advisers say.
"It's a microcosm of 2018 that you're having all over again where you have good data - IBM and few other companies posting strong earnings - but the headlines are still somewhat negative," said Phil Blancato, Chief Executive Officer of Ladenburg Thalmann Asset Management in New York. The trade-sensitive chipmakers fell 0.9 percent, while Boeing Co dropped 0.4 percent, offsetting the impact of a surge in International Business Machines Corp on the tech index and the Dow, respectively.
IBM jumped 7.7 percent after its 2019 profit beat analysts' expectations. So far this earning season, 76 S&P 500 companies have reported fourth-quarter results. Of them, 77.6 percent have beat profit estimates, above the historical average of 64 percent, according to Refinitiv data.
At 12:59 p.m. ET, the S&P 500 was down 5.03 points, or 0.19 percent, at 2,627.87 and the Nasdaq Composite was down 27.63 points, or 0.39 percent, at 6,992.72. The Dow Jones Industrial Average was up 64.17 points, or 0.26 percent, at 24,468.65. It got a boost from IBM as well as United Technologies Corp and Procter & Gamble Co, both of which gained more than 4 percent on strong results.