Stocks were on the rise Friday, buoyed by optimism over U.S.-China trade talks, with President Donald Trump reportedly set to meet China’s top trade negotiator in the White House.
What are stock indexes doing?
The Dow Jones Industrial Average DJIA, +0.69% rose 185 points, or 0.7%, to 26,033, while the S&P 500 index SPX, +0.60% rose 17 points, or 0.6%, to 2,792. The Nasdaq Composite COMP, +0.82% advanced 62 points, or 0.8%, to 7,523.
What’s driving the market?
U.S.-China trade negotiations remain in focus for investors. The two sides reportedly met for more than nine hours Thursday and news reports said Trump will meet with China’s top trade negotiator, Vice Premier Liu He, on Friday.
Still, deep divisions remain over fundamental issues, with U.S. officials pressing China to halt what Washington calls illicit technology transfers and improper subsidies for state-owned firms, The Wall Street Journal reported.
The talks are aimed at avoiding an increase in tariffs on Chinese imports set to occur on March 2, at 12:01 a.m. On Tuesday, President Trump told reporters that the March 2 deadline isn’t a “magical date,” giving investors hope that the deadline will be extended, at least until a meeting can be arranged between Trump and Chinese President Xi Jinping, some time in the coming weeks.
What companies are in focus?
Shares of Kraft Heinz Co. KHC, -27.16% were down more than 28% after the food company reported weaker-than-expected fourth-quarter results, slashed its dividend and revealed an accounting investigation that resulted in a subpoena from the Securities and Exchange Commission.
Wayfair Inc. W, +31.89% rallied 33.5% Friday, after the online home furnishings retailer reported fourth-quarter losses that were smaller than expected, while beating analysts revenue forecasts.
Shares of Dropbox Inc. DBX, -8.61% were down 8.6%, after the company reported earnings late Thursday. While Dropbox beat estimates for fourth-quarter revenue and profits, it offered guidance on margins for 2019 that disappointed.
Stamps.com Inc. STMP, -56.54% stock was in focus after the company announced the end of its exclusive partnership with the U.S. Postal Service, when it reported fourth-quarter earnings Thursday evening. Management said that ending the deal was part of an effort to work with other shipping providers, but would lead to a sharp drop in earnings in 2019. The stock was down 56.3% Friday.
Shares of AutoNation Inc. AN, -3.49% fell 3.7%, after the auto retailer announced a greater decline in fourth quarter earnings and revenue than expected.
Roku Inc. ROKU, +20.36% stock was up 19.8%, after the company announced better-than-expected fourth quarter earnings and revenue, Thursday evening.
What are analysts saying?
“The market is in a precarious position, bumping up against highs not seen since last fall. This could be a textbook wall of worry where the market climbs despite the negative forces its facing,” Mary Ryan, senior equity options strategist at E-Trade Financial Corp., wrote a midday Friday note.
“Trade is the likely catalyst to tip the scales in either direction, and there are three scenarios: If negotiations crumble, we could get a pullback, if they strike a deal we could see a breakout, and anything in between could be a jolt in either direction,” she added. “All these outcomes carry at least some risk of a pullback, so an uptick in volatility could be in the cards.”
“It would appear that there’s been some real progress made in the talks, at least enough to extend the truce and avoid further tariff hikes. This is a major risk for markets and is helping to feed into the improved risk appetite we’ve seen this year,” said Craig Erlam, senior markets analyst at Oanda, in a note. “If Trump’s team can get this over the line before next week’s deadline, it could provide a major boost, although European investors may get a little anxious at the prospect of the U.S. President then turning his attention that way.”
What’s on the economic calendar?
The economic calendar is light on data but features remarks from a number of Fed officials who are attending a monetary policy forum in New York.
New York Fed President John Williams, a voting member of the central bank’s interest-rate committee, gave a talk on the relationship between the unemployment rate and inflation, which economists have worried has broken down in recent years. Williams argued that the relationship is “alive and kicking,” which means that the Fed needs to be ‘vigilant’ towards the prospect of inflation.
Other Fed officials set to speak include Vice Chairman Richard Clarida, Gov. Randal Quarles, New San Francisco Fed President Mary Daly, St. Louis Fed President James Bullard and Philadelphia Fed President Patrick Harker.
How did markets fare yesterday?
Soft global economic data and a mixed batch of figures on the home front saw stocks end Thursday with modest losses. The Dow ended 103.81 points lower at 25,850.63, a loss of 0.4% while the S&P 500 dropped 9.82 points, or 0.4%, to 2,774.88. The Nasdaq Composite snapped an eight day winning streak to fall 29.36 points, or 0.4%, to 7,459.71.
How are other markets trading?
In Asia, stocks closed the day mostly higher, with the Shanghai Composite Index SHCOMP, +1.91% and Hong Kong’s Hang Seng Index HSI, +0.65% both gaining ground. Japan’s Nikkei 225 NIK, -0.18% however, shed 0.2% Friday.
European stocks were trading higher Friday, as the Stoxx Europe 600 SXXP, +0.22% was up 0.2%
In commodities markets, the price of oil CLJ9, +0.81% was rising 0.9%, while the value of gold GCJ9, +0.47% rose 0.3%. The U.S. dollar DXY, -0.11% meanwhile, edged 0.1% lower.
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