Stocks - Wall Street Falls at Open on Profit-Taking; Trump China Briefing Eyed

By Geoffrey Smith

Investing.com -- U.S. stock markets opened mostly lower on Friday on profit-taking after a week of solid gains, as many were content to book profits ahead of a potentially bearish briefing on China by President Donald Trump after the close.

By 10:15 AM ET (1415 GMT), the Dow Jones Industrial Average was down 145 points, or 0.6%, at 25,257 points. The S&P 500 was down 0.4% while the Nasdaq Composite outperformed with a 0.2% gain after a recent run of underperforming the more cyclical traditional indices.

After the close, Trump is expected to announce new U.S. measures to punish China for what the U.S. sees as the suppression of Hong Kong's autonomy through the introduction of a new security law. Any such measures are bound to cause resentment in China, which views the issue as an internal one.

Data released earlier also kept bulls in check, underlining how difficult it will be to support private consumption against a backdrop of record unemployment. Personal spending fell 13.6% in April, even though personal incomes rose 10.5% with the assistance of massive benefit payments across the country. Cleveland Federal Reserve President Loretta Mester told Bloomberg in an interview that the evidence so far makes it hard to believe in a V-shaped recovery.

Mester's boss, Federal Reserve Chairman Jerome Powell, is due to speak at 11 AM ET.

Boeing (NYSE:BA) stock fell 2.6% amid fears that it may suffer Chinese retaliation to whatever Trump announces later, by being placed on China's "unreliable entity" list.

Closer to home, Twitter (NYSE:TWTR) stock fell another 3.9% after Trump signed an executive order late on Thursday that aspires to give regulators greater authority over what social media platforms block or flag. Trump has used Twitter copiously this week to express his anger at what he sees as bias after it marked some of his tweets as unreliable. The company doubled down late on Thursday by restricting another tweet of Trump's "glorifying violence."

Facebook (NASDAQ:FB) stock fell by 0.1%. The company has repeated its mantra that it doesn't want to be the arbiter of free speech on its platform.

Other major movers included Salesforce.com (NYSE:CRM) stock, which fell 5.0% after the software company cut its full-year earnings per share forecast by some 7%. The fact that it still has guidance at all is, however, perhaps hints at an improvement in visibility since the peak of the first-quarter earnings season in April. Cosmetics maker Ulta Beauty (NASDAQ:ULTA) saw its stock fall 4.3% after a disappointing quarterly report, although analysts at Wells Fargo (NYSE:WFC) actually raised their price target afterwards, citing the group's progress in pivoting to online distribution.

In other markets, U.S. Crude Oil Futures fell 1.7% to $33.14 a barrel, likewise succumbing to profit-taking after a rally that priced in a speedy rebalancing of the global market. Such hopes seemed a little ambitious in the wake of data on Thursday showing a big rise in U.S. stockpiles, driven not least by a surge in imports.

Gold Futures, meanwhile, corrected upwards by 1.0% to $1,730 a troy ounce.

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