By Mark DeCambre, MarketWatch , Ryan Vlastelica
Discount brokerage firms slump as JPMorgan offers some free
trading services
U.S. stock benchmarks climbed early Tuesday, testing fresh
all-time highs for the benchmarks as a recent uptrend put stocks on
track to extend gains to a third straight session. Tuesday's gains
come as the U.S. equity market is a day away for becoming the
longest, uninterrupted bull-market in history.
What are the major benchmarks doing
The Dow Jones Industrial Average rose 82 points to 25,837, a
gain of 0.3%. The S&P 500 index advanced by 10 points to 2,867,
a rise of 0.4%. The broad-market benchmark is a hair's breadth shy
of its record at 2,872.87, last put in on Jan. 26.
Meanwhile, the Nasdaq Composite Index climbed 16 points to
7,867, a move of 0.6%.
And the the Dow Jones Transportation Average gained 0.8% at
11,452, after carving out an intraday peak at 11,475.40, marking
the transport gauge's first since Jan. 16.
All three of the major indexes have risen for three straight
sessions; on Monday, the Dow gained 0.4% while the S&P was up
0.2% and the Nasdaq rose 0.1%, with positive sentiment boosted by a
pair of multibillion-dollar deals
(http://www.marketwatch.com/story/stock-futures-inch-up-putting-indexes-near-records-2018-08-20).
At current levels, the S&P is less than 0.3% below all-time
highs while the Nasdaq is about 1% below its record. The Dow is 3%
under is own, but it is very close to exiting a correction
(http://www.marketwatch.com/story/the-dow-is-on-the-verge-of-busting-out-of-correction-phase-for-the-1st-time-in-6-months-2018-08-20)
it has been mired in since February.
Don't miss:Stocks may be finally about to break out of this
trading range
(http://www.marketwatch.com/story/stocks-may-be-finally-about-to-break-out-of-this-trading-range-2018-08-20)
What's driving the market?
With the second-quarter earnings season essentially over and no
economic data on tap, investors are turning their attention to
upcoming news from the Federal Reserve. The minutes from the
central bank's latest meeting will be released on Wednesday, and on
Friday, Fed Chairman Jerome Powell will give a speech at the Fed's
annual summer retreat in Jackson Hole.
Both the minutes and the speech will be scoured for any insight
(http://www.marketwatch.com/story/feds-powell-may-use-jackson-hole-speech-to-discuss-potential-trouble-ahead-2018-08-17)
into what the Fed sees as potential problem spots for the
economy--in particular, market participants will be looking to hear
Powell's thoughts on trade policy and whether the currency crisis
in Turkey could spread to other emerging markets or regions--as
well as for any clues into the Fed's policy plans on interest
rates.
Don't miss:Here's how Jackson Hole could impact the dollar,
bonds and emerging markets
(http://www.marketwatch.com/story/heres-how-the-jackson-hole-gathering-may-influence-the-dollar-bonds-and-emerging-markets-2018-08-20)
The speech could take on political overtones this year, after
multiple media outlets on Monday reported that President Donald
Trump had criticized Powell
(http://www.marketwatch.com/story/trump-ramps-up-criticism-of-powell-reports-2018-08-20).
Trump said he was "not thrilled" with the Fed chairman, who he had
appointed to replace Janet Yellen, and that he expected "more help"
from the central bank. Reuters reported that Trump said he would
continue criticizing the Fed should it continue to raise short-term
interest rates, which the central bank has indicated it will do at
a steady clip.
This isn't the first time Trump has called out the Fed for
raising rates. When he did so in July, Powell stressed that the Fed
operated independently of political considerations.
Separately, investors are continuing to monitor trade relations
between the U.S. and its major trading partners, with talks between
the U.S. and China set to resume on Wednesday. While market
participants are optimistic that progress could be made in the
talks--potentially avoiding a potential trade war, which most
analysts said would be a massive headwind for global economic
growth--few expect the issue to be resolved.
On Monday, President Donald Trump told Reuters that he has "no
time frame"
(http://www.marketwatch.com/story/trump-wary-of-perjury-trap-says-he-could-intervene-in-mueller-probe-2018-08-20)
for ending the trade dispute, and that he didn't "expect much" from
the talks. His administration is also moving forward with tariffs
(http://www.marketwatch.com/story/even-with-trade-talks-on-tap-us-moves-forward-on-new-tariffs-against-china-2018-08-20)
that cover $200 billion in Chinese goods.
Meanwhile, U.S. stocks on Wednesday will mark 10 years and
officially garner the title of the longest bull market on record,
from the March 9, 2009 low, which represented the low of the
financial crisis and which many consider the birth date of the
current bull market.
Read:This bull market in U.S. stocks stands just a day away from
the history books
(http://www.marketwatch.com/story/the-stock-market-is-about-to-make-history-2018-08-14)
What are market analysts saying?
"Should the two sides manage to broker a truce we would expect
risk sentiment to lift dramatically, catapulting the markets
higher," wrote Jasper Lawler, head of research at the London
Capital Group. "Let's not forget that the trade war story has been
weighing on stocks, pressuring equities for the last few months so
any signs that the risk is moderating on a serious scale will boost
investors' appetite for riskier assets and push equity indices
higher."
Speaking about Trump's comments against Powell, Lawler wrote:
"Trump could be sowing the seed for market perception problems
later down the line. For example, should the stronger dollar result
in weaker economic data moving towards December and the Fed decides
not to hike. The market could question whether the Fed opted not to
hike on the basis of data or to appease Trump? So, while Trump
won't influence the path of rate increases, his comments could
impact on market's perception of what is happening, which is an
equally dangerous game to be playing."
What stocks are in focus?
Toll Brothers Inc. (TOL) rose nearly 12% after it reported its
third-quarter results (http://www.marketwatch.com/discover) and
gave a full-year sales outlook.
Coty Inc.(COTY) fell 6% after it reported fourth-quarter revenue
that missed expectations
(http://www.marketwatch.com/story/coty-shares-slide-33-premarket-after-revenue-miss-2018-08-21),
although its adjusted profits topped forecasts by a penny per
share.
Medtronic PLC (MDT) gained 4.3%. The medical device company
posted first-quarter earnings and revenue that beat expectations
(http://www.marketwatch.com/story/medtronics-stock-rallies-after-earnings-revenue-beat-expectations-2018-08-21).
It also raised its organic full-year revenue outlook.
Kohl's Corp. (KSS) reported adjusted second-quarter earnings
that beat expectations, along with revenue that was ahead of
forecasts. It also raised its full-year adjusted profit view. The
stock fell 2.5% in early trade.
J.M. Smucker(SJM) reported adjust first-quarter earnings that
beat expectations. Shares of the company were off 0.4%.
After the market closes, Urban Outfitters Inc.(URBN) and Red
Robin Gourmet Burgers Inc.(RRGB) are expected to report. Urban
Outfitters shares were up 0.7%, while those for Red Robin showed a
slight rise of 0.5%.
Shares of discount brokers slumped after a report that JPMorgan
Chase & Co. (JPM) was taking aim with a plan to launch a new
digital brokerage service that comes with free trades. TD
Ameritrade Holding Corp.'s stock (AMTD) tumbled by about 6%,
Charles Schwab Corp. (SCHW) shed 3.2% and E*Trade Financial Corp.'s
stock (ETFC) slid 3.9% ahead of the open. J.P. Morgan's stock,
meanwhile, gained 1.1%.
(END) Dow Jones Newswires
August 21, 2018 10:20 ET (14:20 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.