Stocks Drop as Trump Talks Rate Hikes

A disappointing round of earnings also weighed on stocks today

Jul 19, 2018 at 4:22 PM
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Stocks slipped into the red at the open, and spent the whole session trading lower. While negative earnings reactions for American Express (AXP) and Travelers (TRV) kept the Dow from extending its daily win streak, renewed trade tensions between the U.S., China, and the European Union also created headwinds. The risk-off backdrop was only stoked by President Donald Trump, who said in an interview with CNBC that he's "not thrilled" with rate hikes -- a rare criticism of the Fed by a president.

Continue reading for more on today's market, including:

  • This VIX options signal points to a possible volatility spike.
  • Options bulls blasted this outperforming Dow stock.
  • Squashed Amazon rumors gave Cisco (CSCO) a boost.
  • Plus, a heavily shorted airline stock; 2 big Square stock price targets; and pre-earnings call volume was hot on this retailer.

The Dow Jones Industrial Average (DJI - 25,064.50) closed not far from its session lows, down 134.8 points, or 0.5%. Twenty-two Dow stocks fell, led by a 3.7% drop for TRV. IBM (IBM) paced the eight advancers, adding 3.3%.

The S&P 500 Index (SPX - 2,804.49) briefly dipped below 2,800, before paring its loss to 11.1 points, or 0.4%. The Nasdaq Composite (IXIC - 7,825.30) surrendered 29.1 points, or 0.4%.

The Cboe Volatility Index (VIX - 12.87) added 0.8 point, or 6.4%.

Closing Indexes Summary July 19

NYSE and Nasdaq Stats July 19

5 Items on Our Radar Today

  1. Merck (MRK) said it will slash the price of its hepatitis C drug, Zepatier, by 60%, while lowering the cost of a number of other drugs by 10%, and said it will raise its average drug price by a percentage not to exceed the annual rate of inflation. This follows ongoing criticism by Trump over drug prices, with the president most recently taking aim at Pfizer (PFE). (MarketWatch)
  2. Regulators are reviewing last year's second-quarter regulatory filing from Wells Fargo (WFC) that disclosed add-on products, including identity theft monitoring, to see whether customers were aware they were receiving the services. According to Dow Jones, the big bank is preparing to make significant refunds to customers as a result. (CNBC)
  3. Short interest is at a record high on this airline stock ahead of earnings.
  4. Square stock hit a new peak today after receiving a pair of upbeat price targets.
  5. Ahead of tomorrow's earnings report, this retailer saw heavy call trading.

Corporate Earnings July 19

Unusual Options Activity July 19

Data courtesy of Trade-Alert

Saudi Arabia Supply Buzz Boosts Oil Prices

Oil prices climbed for a third straight day, on reports Saudi Arabia is willing to curb exports to reduce the risk of oversupply. Crude for August delivery finished the session up 70 cents, or 1%, at $69.46 per barrel.

Gold came off its session lows after Trump chimed in on interest rates, but still finished the session with a loss. At the close, August-dated gold was down $3.90, or 0.3%, to settle at $1,224 an ounce -- the lowest close for a most-active contract since last July.

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