After The Close
The stock market moved higher this morning, and despite some choppiness in the middle of the day, managed to make selective progress. Some of the volatility may have had to do with investor concerns about the Federal Reserve’s monetary policy, as well as ongoing worries about trade relations between the U.S. and China. At the close of trading, the Dow Jones Industrial Average was ahead 63 points; the S&P 500 Index was up five points; while the NASDAQ was up nominally. In general, market breadth was favorable with winners slightly ahead of losers on the NYSE. From a sector perspective, the basic materials issues and industrial names demonstrated some strength, while the healthcare stocks lagged the broader market.
In economic news, the main item of the day was released in the afternoon. Specifically, the FOMC delivered the minutes from its January meeting. Ultimately, the report did not present too much new information and suggested that the central bank will remain accommodative for a while. Tomorrow will be a full day for economic news. Foremost, the weekly initial jobless claims will be released. Furthermore, the latest monthly existing home sales figures will be out.
Meanwhile, some companies are still posting results. Over the past 24 hours, we heard from CVS Health (CVS). Shares of the drugstore operator declined on a weak issuance and forecast. However, in the technology sector, shares of Analog Devices (ADI) moved up, after the semiconductor company put out a good report.
Technically, equities continue to push ahead and are well off the lows reached late in 2018. With the fourth-quarter earnings season drawing to a close, it is not clear what will serve as the catalyst needed to propel equities higher from here. But a resolution of the tensions with China would probably be a big plus.
– Adam Rosner
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before The Bell
That ability to hold somewhat encouraging talks helped stocks to forge ahead as the trading week concluded. But, at least for the start of the new week on Wall Street, there was little follow through. Thus, equities retreated very modestly in the opening minutes of the new trading week, with the Dow giving back about 50 points in the first few minutes. Concerns about the difficulty in reaching a trade deal moved front and center. Although the talks have continued, there is not sense that there is much movement yet going on.
As to specifics, there are worries that the White House may possibly impose steep tariffs on vehicles and auto parts entering our country, as we near the early March deadline for reaching a permanent pact with China. Expectations are that the two sides will agree to a trade deal in time, but that the deadline may need to be pushed back a while. Whatever the case, there were some jitters about early yesterday morning, although the overall sense was one of cautious optimism.
Meanwhile, in other news, retailing behemoth and Dow component Walmart Inc. (WMT – Free Walmart Stock Report) weighed in with quarterly results that topped Wall Street's expectations. The gains were led by the e-commerce business where sales soared 43% in the latest three-month span. Brick-and-mortar sales gained a little over 4%. That more modest uptick, too, beat expectations and the stock showed some early strength. As for earnings season, it is drawing to a close, so mainly the smaller companies are now left reporting, along with those having January end dates.
The market, meantime, would go sideways for the remainder of the morning, but as the afternoon commenced, we did see some buying, which helped to push the Dow comfortably into the black. In all, the Dow, after staying some 10 to 20 points in the plus column through most of the afternoon, firmed up as we entered the final 90-minute mark of trading, pushing up to near an 80-point advance. Expectations that the President would allow the early March date for a trade deal to be pushed out helped sentiment.
But as the session drew to a conclusion, some caution crept back into the averages, and the Dow's earlier uptick shriveled to a mere eight points. Small increases also were tabulated by the S&P 500 and the NASDAQ. Overall, though, the session had a nicely positive tilt to it, with many more issues rising in price that falling. In essence, the recent gains were kept intact, with no slippage of note. How well we do going forward will be in part determined by the success is achieved in our dealings with China.
So, with earnings season wrapping up, the focus clearly will be on trade dealings. Right now, there is still sizable optimism on the trade front, and that could well carry the market to further short-term gains. Meanwhile, looking out to a new day, we see that the major indexes were higher in Asia overnight, while in Europe, the principal bourses are thus far tracking modestly upward this morning. Also of note, Treasury yields are off a bit; oil prices are easing slightly and U.S. equity futures are down slightly, but moving with little conviction.
