U.S. stocks fell Friday after data showed China’s economic growth slowing further in the third quarter offset a good start to the corporate earnings reporting season.

Bearish news on Johnson & Johnson

JNJ, -5.37%

 and Boeing

BA, -3.96%

 also weighed on the Dow.

What are major indexes doing?

The Dow Jones Industrial Average

DJIA, -0.60%

fell 183 points, or 0.65%, at 26,848, while S&P 500

SPX, -0.30%

was off 12 points or 0.42% at 2,985 and the Nasdaq Composite Index

COMP, -0.77%

slipped 76 points or 0.94% to 8,080.

NQZ19, -0.97%

Stocks ended with small gains Thursday, with the Dow up 23.9 points, or 0.1%, at 27,025.88 after flipping between positive and negative territory. The S&P 500 gained 8.26 points, or 0.3%, to close at 2,997.95, while the Nasdaq Composite advanced 32.67 points, or 0.4%, to finish at 8,156.85.

What’s driving the market?

China reported growth of the world’s second-largest economy slowed to 6% in the third quarter from a 6.2% pace in the second quarter, and the slowest pace since the early 1990s, as business investment weakened.

“Friday’s data shows that the decline is accelerating and that trade-war frictions are taking their toll faster than expected,” said Fiona Cincotta, senior market analyst at City Index, in a note.

In U.S economic data, the Conference Board’s index of leading indicators fell for a second month, suggesting the economy grew more slowly in September.

While China’s weaker growth might stir expectations Beijing will be more amenable to completing a trade deal with the U.S., it’s also likely to reinforce concerns about a slowing global economy.

The Wall Street Journal reported that White House advisers warned Trump last week that continued escalation of U.S.-China trade tensions could hit the economy and dampen his re-election chances.

“It is the China thing, but with the start of the earnings season, you always get the good numbers first,” said Maris Ogg, president of Tower Bridge Advisors, in an interview with MarketWatch. “For banks, it’s been a mixed-picture on loan growth,” she said. “We are going to be on the edge of our seats” while wait to hear what more earnings reveal about the health of the U.S. consumer.

Around 70 S&P 500 companies have reported calendar third-quarter earnings this week and of those companies, more than 80% have posted better-than-expected results, FactSet data shows.

While stocks were buoyed Thursday after U.K. and European Union leaders announced a tentative agreement on Brexit, any agreement still faces a significant hurdle in the U.K. Parliament with a debate and vote set for Saturday.

Read: What a Brexit deal would mean for U.S. stocks and global investors

“I would venture that traders are looking to reduce exposure ahead of the weekend,” said Jim McDonald, chief investment strategist at Northern Trust, in a interview with MarketWatch.

“We have a Brexit vote on Saturday and short-term money may not want to be long going into the weekend,” he said, adding that U.S. stocks were near record highs thanks to a good start to the earning’s season.

Markets are also that Federal Reserve officials are meeting in two weeks and are expected to cut interest rates again, while debating whether they have done enough for now to vaccinate the economy against growing risks of a sharper slowdown.

Federal Reserve Vice Chairman Richard Clarida on Friday said the economy is facing “evident” risks, while inflation remains muted. The Fed has already cut interest rates twice this year “to provide a somewhat more accommodative policy in response to muted inflation pressures and the risks to the outlook,” he noted. Clarida’s comments represent the last public word from the Fed leadership ahead of the Oct. 29-30 meeting.

The IMF and World Bank host annual meetings of global finance chiefs in Washington D.C. Friday and Saturday.

Stocks to watch

Johnson & Johnson

JNJ, -5.37%

 fell sharply after the consumer products and drug company said it was recalling “a single lot” of Johnson’s Baby Powder after tests revealed traces of chrysotile asbestos.


BA, -3.96%

  also weighed on the Dow after news that instant messages from 2016 suggest the company misled the Federal Aviation Administration regarding the 737 Max safety.

American Express

AXP, -0.92%

 earned $2.08 per share for the third quarter, 5 cents a share above estimates and revenue also came in above analysts’ forecast.


KO, +2.18%

 reported adjusted quarterly profit of 56 cents per share, in line with forecasts but revenue was higher than expected. Coca-Cola also reported organic sales growth of 5%, beating forecasts, and also raised its full-year guidance for revenue and operating income.


SLB, +1.69%,

the oil field services company beat forecasts by 3 cents with adjusted quarterly profit of 43 cents per share and revenue was above forecasts.

E*Trade Financial

ETFC, +4.82%,

reported quarterly earnings of $1.08 per share, 7 cents a share above estimates and revenue beat forecasts.

How are other markets performing?

The 10-year Treasury note yield

TMUBMUSD10Y, -0.64%

  was lower by 2.1 basis points at 1.736%, while the 2-year note rate

TMUBMUSD02Y, -1.52%

 was almost 4 basis points lower at 1.565%. The 30-year bond yield

TMUBMUSD30Y, +0.06%

  shed 1.6 basis points to 2.227%.

Oil futures also fell Friday, after an initial rally tied to progress toward deals on U.S.-China trade and Brexit. West Texas Intermediate crude for November delivery

CLX19, -0.78%

 shed 50 cents, or 0.9%, to $53.43 a barrel on the New York Mercantile Exchange.

Gold edged lower on Friday, failing to get a lift from a round of weak economic data out of China or a softer U.S. dollar as bears look for the precious metal to continue its retreat from more-than-six-year highs set last month. Gold for December delivery on Comex

GCZ19, -0.24%

 fell $3.40, or 0.2%, to $1,494.90 an ounce, according to FactSet data.

The ICE U.S. dollar index

DXY, -0.32%

  fell less than a quarter-point to 97.39 Friday, pressured by strength in sterling

GBPUSD, +0.5120%

  and the euro

EURUSD, +0.3057%

 after news of a new Brexit agreement this week.

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