Wall Street pressured by J&J, global growth concerns

(Reuters) – Wall Street edged lower on Friday, set to end a strong week on a downbeat note, as heavyweight Johnson & Johnson slipped and worries over global economic growth were rekindled by gloomy data out of China.

The world’s second-largest economy expanded at its weakest pace in almost 30 years in the third quarter amid a bitter trade war with the United States, which has roiled financial markets and fueled fears of a global recession.

“China data just adds to the continued slowing global growth concept that has been out there for a while,” said Chris O’Keefe, managing director at Logan Capital Management in Ardmore, Pennsylvania.

A 4.2% fall in shares of Johnson & Johnson (JNJ.N) also pressured the blue-chip Dow Jones Industrial Average .DJI and the S&P 500 .SPX indexes.

The healthcare conglomerate said it would recall a single lot of its baby powder in the United States after the Food and Drug Administration found trace amounts of asbestos in samples taken from a bottle purchased online.

Limiting losses was a raft of robust earnings. Coca-Cola Co (KO.N) shares gained 2.7% after the beverage maker beat analysts’ expectations for quarterly sales, while Schlumberger (SLB.N) rose as profit beat estimates.

“Coke is being innovative and Pepsi also had stronger-than-expected earnings. Overall, these companies are benefiting from the strength of the consumer,” O’Keefe added.

The consumer staples sector .SPLRCS rose 0.5%, while energy stocks .SPNY gained 0.1%.

American Express Co (AXP.N) posted quarterly profit above expectations and reaffirmed its 2019 earnings forecast, but shares of the credit card issuer slipped 0.7%.

The Dow Jones Industrial Average .DJI was down 74.85 points, or 0.28%, at 26,951.03, while the S&P 500 .SPX was down 4.45 points, or 0.15%, at 2,993.50. The Nasdaq Composite .IXIC was down 40.40 points, or 0.50%, at 8,116.46.

The upbeat start to the earnings season has put the S&P 500 and Dow indexes on track for their second straight week of gains, while the Nasdaq .IXIC was set to rise for the third week in a row.

Of the 73 S&P 500 companies to report results so far, 83.6% have topped earnings expectations.

Investors are now gearing up for earnings from technology companies next week, including those from Microsoft Corp (MSFT.O) and Intel Corp (INTC.O).

Analysts still expect third-quarter S&P 500 earnings to have fallen by 3.1%, according to Refinitiv data, the first contraction since mid-2016.

Macy’s (M.N), Gap Inc (GPS.N) and L Brands (LB.N) led losses among S&P 500 companies, with declines ranging between 5% and 8% after Credit Suisse downgraded their shares and said weak third-quarter retail trends could continue into fall and holiday season.

Declining issues outnumbered advancers for a 1.01-to-1 ratio on the NYSE and for a 1.33-to-1 ratio on the Nasdaq.

The S&P index recorded 20 new 52-week highs and one new low, while the Nasdaq recorded 40 new highs and 32 new lows.

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