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Solid week fizzles out

Markit's PMI releases for April poured cold water on sentiment and the week's gains were pared
Warehouse
Business activity levels in April disappointed

It was a good week for stocks, but it ended on a dull note.

The Nasdaq Composite had ascended to a record close on Thursday but pulled back 6 points to 5,911.

Industrial holding company General Electric Company (NYSE:GE), down 2.4% after first quarter results, contributed to a 31 point slide on the Dow Jones, while the S&P 500 fell 7 points to 2,349.

On the NYSE, China Digital TV Holding Co. Ltd ADRs were the best performers, soaring 44 cents to US$1.71 after the Chinese TV software outfit declared a special cash dividend of US$1.50 a share.

Technology and manufacturing powerhouse Honeywell International Inc (NYSE:HON) advanced 2.7% to US$127.08 after profits came in ahead of expectations.

Adjusted earnings per share of US$1.66 were four cents above the market consensus forecast.

Across the border, Canada's S&P TSX Composite index ended the day in the red, down 11 at 15,614.

12.25 ... Tesla shrugs off product recall

The major benchmarks remained in the doldrums as the week looked set to fizzle out.

Investors may have half an eye on next week's busy schedule for macro data, starting with the first quarter gross domestic product estimate on Monday.

Expectations are for growth to have slowed sharply at the start of the year, to around 1%Q/Q annualized from 2.1%Q/Q previously,” suggested Daiwa Capital Markets.

The S&P 500 was off 5 points (0.2%) at 2,351 while the Dow Jones fared a bit better, down 14 points (0.1%) at 2,351.

Across the border, the TSX Composite index split the difference, sliding 0.15% to 15,602.

Stateside, glamor stock Tesla Inc (NASDAQ:TSLA) shrugged off the negative publicity from its recall of nearly two-thirds of the vehicles it made last year.

READ Brake issue brings Tesla’s recent rise to a halt

Shares edged higher by 0.8% to US$304.77.

Also on the up was credit card issuer Visa Inc (NYSE:V) after it released its results last night. UBS responded by increasing its price target to US$102 from US$97. Visa shares were trading at US$91.68, up 53 cents.

10.25 ... Weaker than expected PMI data sours sentiment

Expectations that stocks would open on the front foot proved unfounded, with stocks turning south after business activity unexpectedly slowed in April.

Markit's survey of purchasing managers in the services sector fell to 52.5 in April, from the previous month’s reading of 52.8. Analysts had expected the reading to recover to 53.0.

The manufacturing purchasing managers’ index (PMI) eased to 52.8 in April from March's 53.3. Analysts had expected an increase to 53.5.

“Although today’s Markit figures show a decline in manufacturing last month, US industry looks to be fairly stable for the time being, with talk of President Trump’s protectionist policies and infrastructure investment still carrying weight," opined Dennis de Jong, managing director at UFX.com

“However, if manufacturing decline becomes the norm, the president could come under increased public pressure, with his election win built on ambitious promises to return the blue-collar sector to its former glory.

“The recent review into the benefit of cheap steel imports may appease his supporters in the meantime, but it seems various underlying structural issues still need to be addressed,” he added.

The S&P was down a couple of points at 2,354 after half an hour of trading, while the Dow Jones was down 8 points at 20,571, with General Electric Company (NYSE:GE) leading the index lower after its first quarter results.

GE shares were off 0.9% at US$30 after an initially favorable reaction to its first quarter results.

Sneakers maker Skechers USA Inc (NYSE:SKX) also found the market hard to please, as it shares retreated 1.5%, despite seeing its quarterly revenue pass the US$1bn mark for the first time in its history, thanks in part to strong growth in international markets.

READ Sneaker maker Skechers USA sees quarterly revenue pass US$1bn mark for the first time

Oilfield services giant Schlumberger Limited (NYSE:SLB) was friendless after its quarterlies.

The stock shed 3.5% as the company revealed a net income of US$279mln in the first three months of 2017 that was barely half the US$501mln achieved in the same period of last year.

Going the other way was Visa Inc (NYSE:V) after it raised full-year guidance in its quarterly results.

On Nasdaq, cancer treatment specialist CytRx Corporation (NASDAQ:CYTR) climbed 9.5% to US$0.5507 after it unveiled results from its global Phase 3 clinical trial evaluating aldoxorubicin's effect on patients with relapsed and refractory soft tissue cancer cells.

Preview

Global tensions edged up again following Thursday's terrorist attack in Paris, but US markets were nevertheless expected to open higher on Friday.

Spread betting quotes indicated the benchmark S&P 500 index will open a couple of points higher at 2,357 while the more narrowly-based Dow Jones was seen starting just above the 20,600 level, after closing last night at 20,578.

Early on the spotlight is likely to be on credit card outfit Visa Inc (NYSE:V) and toys maker Mattel Inc (NASDAQ:MAT), both of which have made trading updates.

Visa edged 2.4% higher to US$93.30 in pre-market trading as it raised full-year profits guidance on the back of a better-than-expected quarterly statement.

In the three months to the end of March – the second quarter of the company's fiscal year – total payments volumes were up 37.2% year-on-year at US$1.73bn on a constant currencies basis.

The company brought Visa Europe into the fold in June of last year and this gave a significant leg-up to volumes, accounting for nearly a fifth of payment transactions handled by the company.

Shareholders of Mattel were throwing their toys out of the baby-carriage after the company's first quarter results were published after the bell yesterday.

The underlying loss per share was 32 cents, with net sales lower at US$735.6mln from US$869.4mln the year before.

Mattel said the performance was below expectations due to high stock levels at retail outlets heading into the end-of-year present buying season.

Shares in Mattel were down 6.6% in pre-market trading.

This morning saw the General Electric Company (NYSE:GE) beat the market's expectations with its earnings and revenue numbers.

GE pitched up with earnings per share of 21 cents on revenue of US$27.66bn in the first quarter.

Analyst had penciled in 17 cents a share for earnings on revenue of US$26.4bn.

Shares rose 1% in screen-based trading ahead of the market's official open.

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