US stocks veer higher, recovering from early stumble

Posted on Monday, March 25th, 2019 By Alex Veiga, AP Business Writer

Retailers led U.S. stocks broadly higher Monday as the market bounced back from an early stumble.

Kohl's gained 3.9 percent, Macy's added 3.7 percent and Nordstrom rose 3 percent. Industrial and financial stocks also notched gains, outweighing losses in technology companies. Norfolk Southern picked up 2 percent, Regions Financial added 1.6 percent and chipmaker Nvidia dropped 2.2 percent.

The market had been headed lower in early trading, on track to extend sharp losses from a broad sell-off last week, as new economic data stoked investors' worries over slowing global growth. A sharp decline in bond yields last week also drove the selling.

On Monday, another survey showed that business economists foresee a significant slowdown in U.S. growth over the next two years. That's in sharp contrast to the Trump administration's predictions that growth will accelerate in the coming years.

The market's recent skid follows what has been a strong start to the year on Wall Street as stocks rebounded from a steep slide at the end of 2018. The bull market for U.S. stocks recently marked its 10th anniversary and is now the longest of all time.

Monday's shaky start to the week for markets came amid a lull in news on the tariffs war between the United States and China. Trade talks are due to resume Thursday in Beijing.

U.S. stock indexes did not appear to have a significant move either way in response to news that the special counsel's probe into Russian meddling in the 2016 presidential election concluded without finding evidence that the Trump campaign conspired or coordinated with Russia.

KEEPING SCORE: The Dow Jones Industrial Average rose 35 points, or 0.1 percent, to 25,538 as of 11:39 a.m. Eastern Time. The S&P 500 index and the Nasdaq composite were little changed. The Russell 2000 index of smaller company stocks picked up 0.5 percent.

Despite the market's recent slide, the S&P 500 index is still up more than 11 percent so far in 2019, which is still an unusually strong start to a year.

ECONOMIC JITTERS: Citing a global slowdown and trade conflicts, economists from the National Association for Business Economics collectively project that growth will reach a modest 2.4 this year and just 2 percent in 2020. Still, the economists say they think a recession remains unlikely any time soon.

Worried investors have shifted money into bonds, sending yields lower. The yield on the 10-year Treasury slid to 2.43 percent from 2.45 percent late Friday.

That remains slightly below the yield on the three-month Treasury bill, a worrying sign that in the past has preceded recessions. That "inversion" occurred on Friday and has spooked investors.

NOTHING TO SEE HERE: Wall Street appeared to shrug off the big news over the weekend on the outcome of Special Counsel Robert Mueller's two-year investigation into Russia's interference in the 2016 presidential election.

Attorney General William Barr issued a summary of the report Sunday, in which Mueller did not find evidence that President Donald Trump's campaign conspired or coordinated with Russia to influence the election. Mueller also reached no conclusion on whether Trump obstructed justice.

What does this mean for investors? The end of the Russia probe alleviates big unknown policy risks for the market and has the potential to have a "real impact" on the White House's agenda, including trade negotiations with China, according to analysts at Raymond James & Associates.

"The lack of additional indictments and the conclusion of the investigation should serve as a market positive and further lessens the (already low) odds of President Trump being removed from office via impeachment," the analysts wrote in a note published early Monday. "On the international front, we see real impacts on trade negotiations with China as easing domestic pressure could embolden the President to seek a stronger trade deal."

BLACKOUT AVERTED: Media company Viacom rose 6.6 percent after the company reached a carriage deal with AT&T that would avert a blackout of its channels including Comedy Central and MTV to AT&T customers.

CROSSING THE STREAM: Apple dropped 0.5 percent ahead of the consumer electronic giant's expected announcement later Monday that it is launching a video streaming service that could compete with Netflix and Amazon Prime.

The service is expected to offer original TV shows and movies that reportedly cost Apple more than $1 billion and a subscription service consisting of news, entertainment and sports bundled from newspapers and magazines.

Apple is pushing digital subscriptions as it searches for new growth amid declining sales of its iPhones, long the company's marquee product and main money maker.

DOWNGRADED: Akamai Technologies slid 3.5 percent after analysts at Deutsche Bank downgraded the stock to "Sell" from "Hold," citing expectations that sales and earnings will fall short Wall Street forecasts through fiscal 2021.

OVERSEAS: Major European stock indexes headed lower as uncertainty over Brexit continued. British Prime Minister Theresa May was under intense pressure to resign as the price of breaking the country's Brexit impasse and winning support for her unpopular EU divorce deal.

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