By Chris Matthews and Barbara Kollmeyer, MarketWatch
Optimism remains over potential for China-U.S. trade deal
U.S. stocks saw solid gains Tuesday morning, after lawmakers
reached a tentative deal to prevent a government shutdown and
optimism grew over a potential trade deal between the U.S. and
China.
How are major indexes faring?
The Dow Jones Industrial Average rose 240 points, or 1%, to
25,297, while the S&P 500 added 25 points, or 0.9%, to 2,735.
The Nasdaq Composite Index jumped 81 points, or 1.1%, to 7,390.
Read: Morgan Stanley warns of a looming earnings recession
(http://www.marketwatch.com/story/stock-market-may-be-in-for-a-rude-awakening-as-profits-dry-up-warns-strategist-2019-02-11)
What's driving the market?
Democratic and Republican lawmakers said late Monday that a deal
has been reached
(http://www.marketwatch.com/story/lawmakers-reach-border-security-deal-that-would-avert-shutdown-2019-02-11)
to avert another damaging government shutdown. Committed to
avoiding the repeat of such a scenario, GOP negotiators agreed to a
border-security deal that will involve far less money for an
extension of the southern U.S. border wall than President Donald
Trump has been demanding.
The tentative deal, which involves 55 miles of new border
fencing, still requires approval from Trump, who told a rally in El
Paso, Texas that "progress is being made with this committee." He
added: "Just so you know, we're building the wall anyway."
Trade negotiations entered a second day Tuesday in Beijing, with
Treasury Secretary Steven Mnuchin and U.S. Trade Representative
Robert Lighthizer due to arrive Thursday for more high-level
discussions. A 12:01 a.m. Eastern time March 2 deadline is looming
for an agreement to be struck between the two countries.
Meanwhile, investors digested a new batch of earnings releases
Tuesday, as fourth-quarter earnings season enters its final
stretch.
Which stocks are worth watching?
Coty Inc. (COTY) shares were in focus Tuesday, after JAB
holdings announced its plans to commence a tender offer to acquire
150 million shares of the company at a price of $11.65 per share,
versus Monday's closing price of $9.66 per share. The stock is up
16.4%, early Tuesday.
Shares of Molson Coors Brewing Co. (TAP) were down 6.5% Tuesday
morning, after the beer maker reported higher-than-expected,
fourth-quarter earnings Tuesday morning
(http://www.marketwatch.com/story/molson-coors-stock-drops-after-profit-beats-but-sales-miss-as-us-volume-fell-2019-02-12),
while missing Wall Street revenue forecasts.
The company also disclosed Tuesday that it will restate its
financial performance for the years ended in December 2016 and
December 2017
(http://www.marketwatch.com/story/molson-coors-to-restate-results-discloses-material-weakness-in-financial-reporting-controls-2019-02-12),
as those annual reports can no longer be relied on due to errors in
accounting for income taxes related to deferred tax liabilities for
its partnership with MillerCoors LLC
Ellie Mae Inc. (ELLI) stock was in focus after the company said
it agreed to be acquired by private-equity firm Thoma Bravo in a
deal worth $3.7 billion. The stock is up 21.2% Tuesday.
Under Armour Inc. (UAA) stock was down 2.6%, even after the
company beat earnings and revenue estimates
(http://www.marketwatch.com/story/under-armour-shares-climb-premarket-after-earnings-beat-2019-02-12)
for the fourth quarter.
Shares of Gilead Sciences Inc. (GILD) were falling 4.7% early
Tuesday, after the pharmaceutical company announced Monday evening
that a late-stage, placebo-controlled study designed to evaluate a
type of chronic liver disease drug, Selonsertib, didn't meet its
desired outcome
(http://www.marketwatch.com/story/gilead-stock-down-nearly-4-as-drug-trial-fizzles-2019-02-11)
without worsening the patients' condition.
US Foods Holding Corp. (USFD) shares were down 4.9% Tuesday,
after the company reported fourth-quarter earnings that fell short
of Wall Street forecasts, though it surpassed revenue
expectations.
Shares of Electronic Arts. Inc. (EA) were up 6.5% Tuesday, after
the videogame publisher announced that its new game
(http://www.marketwatch.com/story/electronics-art-stock-pops-after-detailing-early-apex-legends-popularity-2019-02-11),
"Apex Legends," had attracted 25 million new players in its first
week of availability.
Anticipated reports from TripAdvisor Inc. (TRIP) and Activision
Blizzard Inc. (ATVI) are due after the market closes.
What are the analysts saying?
"The relief from avoiding another government shutdown, and
speculation that something will happen with China, is helping push
markets higher, though I'm surprised at this reaction, given that
Trump has not yet said he'd sign the deal," Larry Benedict, chief
executive of the Opportunistic Trader told MarketWatch.
"The S&P 500 is pushing up against the 2,735 resistance
level that we've hit several times. There may be more on the
upside, but we could also be seeing some topping action at these
levels," he said.
What data and Fed speakers are in focus?
The National Federation of Independent Businesses small business
index fell 3.2 points to 101.2
(https://www.nfib.com/surveys/small-business-economic-trends/), the
lowest level since the weeks leading up to the 2016 presidential
election, though above its historical average of 86.
The number of job openings in the U.S. reached an all-time high
of 7.3 million in December, the Labor Department reported Tuesday.
The share of Americans quitting there jobs held steady at 2.3%
The Federal Reserve will issue a report on household credit
growth at 11 a.m.
At 12:45 p.m. Fed Chairman Jerome Powell will give a speech on
rural economic policy at Mississippi Valley State University.
At 6:30 p.m. Cleveland Fed President Loretta Mester, an
alternate voting member of the central bank's interest-rate setting
committee, will give a speech on the economic outlook and monetary
policy at Xavier University at 6:30 p.m.
Kansas City Fed President Esther George, a voting member, will
give a speech on 'charting U.S. economic course' in Kansas City at
7:30 p.m.
How did the major benchmarks fare yesterday?
On Monday
(http://www.marketwatch.com/story/us-stock-futures-set-for-higher-start-as-trade-talks-kick-off-china-equities-rise-2019-02-11),
the Dow fell 53.22 points, or 0.2%, to 25,053.11, while the S&P
500 rose 1.92 points to 2,709.8, and the Nasdaq Composite Index
gained 0.1% to 7,307.90.
How are other markets trading?
In Asia
(http://www.marketwatch.com/story/asian-markets-gain-as-investors-pin-hopes-on-us-china-trade-talks-2019-02-11),
the Nikkei 225 index returned from a holiday to jump 2.6%, while
the Shanghai Composite rose 0.6%, and most other indexes rose. The
Stoxx Europe 600 was also in positive territory, while the U.K.'s
FTSE 100 edged lower
(http://www.marketwatch.com/story/london-lifted-as-us-shutdown-threat-eases-tui-under-pressure-2019-02-12).
Crude oil was up, while gold is higher and the U.S. dollar is
falling slightly, relative to its peers.
(END) Dow Jones Newswires
February 12, 2019 10:18 ET (15:18 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Apr 2024 to May 2024
FTSE 100
Index Chart
From May 2023 to May 2024