US open: Stocks pause for breath, fund managers cautious

Stocks paused for breath following two days of sharp gains as analysts continued to adjust to the changing market landscape following the presidential election results.

Indices fell across the board with the Dow Jones was down by 0.25%, S&P 500 by 0.50% and Nasdaq by 0.30% at 1528 GMT.

Financial Analyst Connor Campbell at Spreadex commented: “The markets remained a mess this Friday afternoon, a variety of different post-election interpretations causing the trading boards to become increasingly splashed with red.”

He added that despite the Dow Jones failing to build on yesterday’s “historic high” it may regain ground after the European markets close as it “has consistently proved it has spare pockets of fuel late into the last few US sessions.”

Campbell's observations were confirmed by the results Bank of America-Merrill Lynch 'flash' Fund Managers Survey, released the day before, showing investors had mostly chosen to sit on their cash piles following Trump's victory, with the remainder evenly split between those who increased their liquidity as a precaution and those who deployed some of it.

Some asset classes, such as bonds and cyclicals, had also already reached so-called 'overbought' levels, BofA-Merrill said.

Oil prices took a hit, with Brent crude oil futures falling 2.27% to $44.82 per barrel and West texas intermediate down by 2.41% to $43.61.

Federal Reserve Vice Chairman Stanley Fischer spoke at the Central Bank of Chile on Friday outlining the central bank’s plan for monetary policy going forward.

According to Fischer, the US has almost reached its goals for maximum employment and price stability, strengthening the case for raising interest rates. He also said the case for removing accommodation is “quite strong”.

Consumer sentiment in the US improved more than expected in November, hitting its highest level since mid-2016. The University of Michigan’s preliminary consumer sentiment index rose to 91.6 in November from 87.2 the month before and 91.3 in the same month last year, beating expectations for a reading of 87.5.

US economist at Capital Economics Andrew Hunter is however sceptical of the findings. “This index hasn’t been a very good guide to consumption growth recently, and we suspect that growth of closer to 2% is more realistic, especially if the election result ends up having a more adverse impact on confidence than the pre-election data suggest,” said Hunter.

The dollar which was down against the pound earlier got a boost from the consumer sentiment date, rising by 0.34% against the pound. It however fell 0.12% against the yen, and against the Euro by 0.28%.

In corporate news, JC Penney’s shares took a dive after the company cut its sales forecast for this year.

Walt Disney share price went up as its fourth quarter profits rose by 10% to $1.77bn, but failed to deliver on analysts' expectations.

Nvidia rallied after it said late on Thursday that third-quarter profit more than doubled.

Dow Jones - Risers

Walt Disney Co. (DIS) $96.98 2.13%
Procter & Gamble Co. (PG) $83.81 1.02%
Cisco Systems Inc. (CSCO) $31.24 0.76%
General Electric Co. (GE) $30.60 0.62%
Apple Inc. (AAPL) $108.40 0.57%
Unitedhealth Group Inc. (UNH) $146.80 0.46%
International Business Machines Corp. (IBM) $160.82 0.37%
Nike Inc. (NKE) $50.57 0.36%
Visa Inc. (V) $82.15 0.34%
Goldman Sachs Group Inc. (GS) $201.53 0.33%

Dow Jones - Fallers

E.I. du Pont de Nemours and Co. (DD) $68.88 -2.92%
Pfizer Inc. (PFE) $32.55 -2.81%
Merck & Co. Inc. (MRK) $63.83 -1.75%
Exxon Mobil Corp. (XOM) $85.83 -1.40%
Caterpillar Inc. (CAT) $92.33 -1.20%
Chevron Corp. (CVX) $106.66 -1.05%
Johnson & Johnson (JNJ) $118.42 -0.94%
Wal-Mart Stores Inc. (WMT) $70.76 -0.88%
United Technologies Corp. (UTX) $107.52 -0.82%
JP Morgan Chase & Co. (JPM) $76.09 -0.73%

S&P 500 - Risers

Nvidia Corp. (NVDA) $84.53 24.73%
Qorvo, Inc. (QRVO) $53.48 3.72%
Vornado Realty Trust (VNO) $95.32 3.10%
Sl Green Realty Corp. (SLG) $104.91 3.09%
Western Union Co. (WU) $20.47 2.66%
Ford Motor Co. (F) $12.24 2.51%
Walt Disney Co. (DIS) $96.98 2.13%
Kohls Corp. (KSS) $51.98 1.98%
Ventas Inc. (VTR) $58.99 1.95%
H&R Block Inc. (HRB) $22.47 1.93%

S&P 500 - Fallers

Diamond Offshore Drilling Inc. (DO) $15.21 -8.04%
Archer-Daniels-Midland Co. (ADM) $41.75 -7.59%
Alexion Pharmaceuticals Inc. (ALXN) $117.27 -7.57%
Centene Corp. (CNC) $52.06 -6.08%
Newmont Mining Corp. (NEM) $32.59 -6.03%
Murphy Oil Corp. (MUR) $27.21 -5.22%
Transocean Ltd. (RIG) $9.97 -5.05%
Pioneer Natural Resources Co. (PXD) $170.46 -5.00%
Alcoa Corporation (AA) $27.71 -4.78%
Mosaic Company (MOS) $26.92 -4.64%