By Chris Matthews and Barbara Kollmeyer, MarketWatch

China's president convenes meeting of officials to discuss growth

U.S. stocks were in retreat Tuesday morning, as fresh concerns over the state of the global economy greeted investors returning from the long holiday weekend.

Earnings will also remain in focus, with a busy week ahead.

How are the benchmarks trading?

The Dow Jones Industrial Average fell 152 points, or 0.6%, to 24,554, while the S&P 500 index dropped 23 points, or 0.9%, to 2,648. The Nasdaq Composite Index fell 73 points, or 1%, to 7,084.

What's driving markets?

After the country posted the slowest annual pace (http://www.marketwatch.com/story/china-posts-slowest-economic-growth-since-1990-2019-01-20) of annual growth -- 6.6% -- since 1990, President Xi Jinping reportedly convened a meeting of high-level Communist Party officials (https://www.abc.net.au/news/2019-01-22/xi-jingping-china-president-warns-black-swans-grey-rhinos/10736442), urging them to be alert over "black swan" and "gray rhino" financial events in face of an economic slowdown. Trade tensions are partly to blame for the weak data.

Read:On trade, China's private-equity king is 'hopeful for the best, prepared for the worst' (http://www.marketwatch.com/story/on-trade-chinas-private-equity-king-is-hopeful-for-the-best-prepared-for-the-worst-2019-01-19)

Citing that weak data, President Donald Trump tweeted late Monday that China needs to "finally do a Real Deal and stop playing around," when it comes to trade. But the two countries reportedly remain (http://www.marketwatch.com/story/us-china-remain-at-loggerheads-over-intellectual-theft-issue-reports-2019-01-21) far apart on key issues such as theft of intellectual property, which the U.S. says China has engaged in for decades.

(https://twitter.com/realDonaldTrump/status/1087469381586771973)

On Saturday, Trump said stock-rallying reports (http://www.marketwatch.com/story/trump-says-stock-rallying-reports-of-lifting-chinese-trade-sanctions-were-premature-2019-01-19)last week that the U.S. would ease tariffs on China were not correct, even as he said talks were "going very well."

Read:The investor known as the 'Warren Buffett of Boston' rattles Davos crowd with this warning (http://www.marketwatch.com/story/the-oracle-of-boston-rattles-davos-crowd-with-this-warning-for-investors-2019-01-22)

Potentially adding to trade tensions was a report (https://www.cnbc.com/2019/01/22/huawei-exec-meng-wanzhou-us-to-formally-seek-extradition-report-says.html) that the U.S. plans to formally request from Canada the extradition of Huawei's chief financial officer, Meng Wanzhou, over allegations she lied about the company's dealings with Iran.

Meanwhile, on Monday, the International Monetary Fund cut its global growth forecast to 3.5% for 2019, from 3.7% in 2018 (http://www.marketwatch.com/story/imf-cuts-world-economic-forecast-for-2019-citing-trade-tensions-2019-01-21) and from the 3.7% it predicted for 2019 back in October. Unveiling its forecasts at the World Economic Forum in Davos, Switzerland, the fund left its prediction for U.S. growth this year unchanged at 2.5%.

A partial government shutdown stretched into its 31st day on Tuesday, and there was little sign of the deadlock breaking. Democrats rejected Trump's latest proposal (http://www.marketwatch.com/story/democrats-dismiss-trumps-latest-plan-but-it-may-get-senate-vote-2019-01-20) to temporarily extend protections for some young immigrants brought to the country illegally as children, in exchange for $5.7 billion for his border wall.

The shutdown has caused a backlog of economic data (http://www.marketwatch.com/story/economy-is-hitting-more-turbulence-but-the-shutdown-leaves-investors-partly-in-the-dark-2019-01-19), with only a smattering of reports due this week, including existing home sales, jobless claims and Markit manufacturing and services purchasing managers index data.

Investors will also be digesting a fresh round of corporate earnings Tuesday, and they will be paying close attention to management commentary on the global economic outlook. As of Friday, 11% of S&P 500 companies have reported, according to FactSet, with 56% announcing earnings beats, below the five-year average of 60%.

Opinion: These 3 leading economic indicators show no recession is coming (http://www.marketwatch.com/story/these-3-leading-economic-indicators-say-no-recession-is-coming-2019-01-21) (http://www.marketwatch.com/story/ibm-earnings-emerging-tech-expected-to-account-for-half-of-sales-as-revenue-declines-2019-01-17) (http://www.marketwatch.com/story/tech-companies-are-ready-to-respond-to-wall-streets-doubts-but-dont-expect-a-holiday-miracle-2019-01-17)

Which stocks are in focus?

Arconic Inc. (ARNC) stock tumbled more than 15% early Tuesday, after the maker of steel products for the car and aerospace industries said it is no longer pursuing a sale of the company (http://www.marketwatch.com/story/arconic-shares-slide-27-premarket-after-company-says-no-longer-pursuing-a-sale-2019-01-22).

Shares of Johnson & Johnson (JNJ) fell 1.6%, even after the firm announced fourth-quarter results (http://www.marketwatch.com/story/johnson-johnson-tops-estimates-for-fourth-quarter-2019-01-22) that surpassed analysts expectations for revenue and earnings.

Shares of IBM Corp. (IBM) fell 0.2%, ahead of the company's Tuesday evening earnings announcement (http://www.marketwatch.com/story/ibm-earnings-emerging-tech-expected-to-account-for-half-of-sales-as-revenue-declines-2019-01-17).

Halliburton Co. (HAL) stock tumbled 5.4% early Tuesday, even after the oil-services company reported fourth-quarter profit and revenue (http://www.marketwatch.com/story/halliburton-tops-profit-and-revenue-expectations-shares-slip-2019-01-22) that beat Wall Street estimates.

Shares of Travelers Companies Inc. (TRV) were down 0.8%, after the insurer announced (http://www.marketwatch.com/story/travelers-beats-earnings-estimates-despite-higher-catastrophe-losses-2019-01-22) it beat analysts estimates for both sales and earnings in the fourth quarter.

Bunge Ltd. (BG) shares retreated 2.3%, after the agriculture and food business company announced that it's full-year earnings (http://www.marketwatch.com/story/bunge-says-adjusted-ebit-to-be-hurt-by-china-trade-issues-lower-brazilian-ethanol-prices-2019-01-22) would fall short of its previous guidance.

Stanley Black & Decker Inc. (SWK) shares were down 15.2% after the firm gave disappointing guidance for 2019 (http://www.marketwatch.com/story/stanley-black-decker-shares-fall-nearly-7-after-weak-2019-guidance-2019-01-22).

Shares of eBay Inc. (EBAY) rose 8.6% Tuesday morning, after Elliot Management, an activist hedge fund that says it now owns more than 4% of eBay stock, issued a letter to eBay's managemen (http://www.marketwatch.com/story/ebay-stock-soars-12-after-elliott-managment-suggests-plan-to-fix-prolonged-underperformance-2019-01-22)t laying out a five-step plan that Elliot said could lead to a valuation of $55 to $63 per eBay share by the end of 2020.

Read:Tech is ready to respond to Wall Street's doubts, but don't expect a holiday miracle (http://www.marketwatch.com/story/tech-companies-are-ready-to-respond-to-wall-streets-doubts-but-dont-expect-a-holiday-miracle-2019-01-17)

What are the analysts saying?

"Today's selloff is a result of the big move we had on Thursday and Friday," Ed Keon, chief investment strategist at QMA told MarketWatch.

"Markets are trying to find the right level. We were too low on Christmas Eve. We've had a substantial rebound, but it's not like there aren't things that can go wrong or are going wrong," like a slowing Chinese economy, he said.

Keon said that on balance, corporate executives' outlooks for the coming year haven't been encouraging. "A number of executives are guiding lower," he said, adding that analysts estimates for earnings growth for 2019 are also falling at a rapid rate of one percentage point per month.

"When analysts forecasts are dropping like this, when they're falling at 1 [percentage point] per month, they tend to keep falling throughout the year."

See:U.S. will seek extradition of Huawei executive from Canada: report (http://www.marketwatch.com/story/us-will-seek-extradition-of-huawei-executive-from-canada-report-2019-01-22)

Which data are traders watching?

Existing home sales fell to a seasonally adjusted annual rate of 4.99 million in December (http://www.marketwatch.com/story/existing-home-sales-slide-to-a-3-year-low-as-housing-market-stumbles-2019-01-22), their lowest three years, according to the National Association of Realtors.

How did markets trade Friday?

Stocks closed higher for a fourth straight session on Friday (http://www.marketwatch.com/story/us-stock-futures-extend-gains-as-investors-cling-to-hope-of-trade-resolution-2019-01-18). The Dow Jones Industrial Average rose 336.25 points, or 1.4%, to end at 24,706.35 for a weekly gain of 3%. The S&P 500 index advanced 1.3% to 2,670.71, up 2.9% for the week. The Nasdaq Composite added 1% to 7,157.23, finishing out the week 2.7% higher.

Most U.S. financial markets were closed Monday for the Martin Luther King Jr. Day holiday.

How are other markets trading?

Trade and growth worries weighed on Asia markets (http://www.marketwatch.com/story/asian-markets-slip-on-global-growth-worries-2019-01-21), with the Shanghai Composite Index sliding 1.4%. In Europe, stocks are lower, with the Stoxx Europe 600 falling 0.7%.

Crude oil dropped 3.4% (http://www.marketwatch.com/story/oil-slumps-on-renewed-global-growth-fears-2019-01-22) to $51.99 per barrel, while gold held steady (http://www.marketwatch.com/story/gold-struggles-to-regain-footing-despite-renewed-global-growth-worries-2019-01-22) and the U.S. dollar ticked 0.1% higher (http://www.marketwatch.com/story/dollar-muted-and-yen-stronger-in-risk-off-currency-trading-2019-01-22).

(END) Dow Jones Newswires

January 22, 2019 10:36 ET (15:36 GMT)

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