U.S. stocks pushed higher Wednesday as investors monitored another batch of corporate earnings results amid a U.S. and China preliminary trade deal.
4:04 p.m. ET Stocks erase gains after trade deal signing
Stocks closed at new records, with the Dow closing above 29,000 for the first time, but significantly lower than the highs of the day that followed the signing of a “Phase one” trade deal between the U.S. and China.
Here’s where the major indices were as of 4:04 p.m. ET:
S&P 500 (^GSPC): +0.19% or +6.21 points to 3,289.36
Dow (^DJI): +0.32% or +91.16 points to 29,030.83
Nasdaq (^IXIC): +0.08% or +7.37 points to 9,258.70
Crude oil (CL=F): -0.45% or -0.26 to 57.97 a barrel
Gold (GC=F): +0.75% or +11.60 to 1,556.20 per ounce
2:58 p.m. ET: Health care stocks get trade deal boost
Health care stocks got a boost after an earnings beat from health insurance giant UnitedHealth, with the Health Care Select Sector SPDR Fund (XLV) up 1% and the SPDR S&P Pharmaceuticals ETF (XPH) up 0.5%.
Health stocks maintained gains after the signing of the “Phase one” trade deal, in which China agreed to resolve conflicts between the two countries on drug patents, which could help American drug companies protect their patents internationally, Bloomberg reports.
2:02 p.m. ET: Fed’s Beige Book: Trade tensions weigh
Trade tensions weighed on a modestly expanding economy during the last six weeks of 2019, according to a survey by the Federal Reserve, Reuters reports.
"In many districts, tariffs and trade uncertainty continued to weigh on some businesses," the Fed said in its Beige Book report.
1:05 p.m. ET: Stocks hold gains as Trump signs China deal
After much ado, U.S. and China finally sign the long-awaited “Phase One” trade deal. Stocks have pulled back from session highs, but remain higher on the day.
In signing the deal Trump called talks “tough, honest, open and respectful,” but the deal would correct “the wrongs of the past.” He also pledged to journey to China in the “not too distant future.”
12:15 p.m. ET: GM converts 1500 workers to full time
Via Reuters, General Motors (GM) said on Wednesday more than 1,350 hourly employees at its assembly plants in the United States will transition into full-time roles in the first quarter of this year. The employees are from 14 General Motors manufacturing facilities in Michigan, Indiana, New York, Texas, Tennessee, Missouri, Kansas and Kentucky.
GM’s stock is marginally lower on the day around $35 per share.
11:47 a.m. ET: China convo ‘has completely changed’
As President Donald Trump signs a long-awaited ‘Phase 1’ trade agreement with China, one analyst explains that the president deserves credit for having shifted the Sino-American dynamic:
“One of the things that Trump does absolutely get credit for is that the conversation with China has completely changed,” Ed Mills, Washington policy analyst at Raymond James, tells Yahoo Finance’s The First Trade.
Here’s where major indexes were trading just before midday:
S&P 500 (^GSPC): +0.45% to 3,298.06
Dow (^DJI): +0.58% to 29,106.44
Nasdaq (^IXIC): +0.43% to 9,291.44
Crude oil (CL=F): -0.91% to $57.70 a barrel
Gold (GC=F): +0.43% to $1,551.20 per ounce
11:30 a.m. ET: Target misses the mark on holiday sales
Retailers had a challenging Thanksgiving-Christmas sales season, largely because of a shortened holiday period. Yet drilling down into Target's foot traffic analytics, Placer.ai’s Ethan Chernofsky said the news wasn’t entirely bad:
Looking at November and December traffic year over year, there is a minor decline in visits of just over 1% from 2018 to 2019. This is in line with what we're seeing across the industry because of the shorter holiday season in 2019 - Thanksgiving started almost a week later. That said, most of the key 'days' saw Target enjoying a year-over-year increase including an 8% bump on Black Friday, and really strong weeks heading into Christmas. The interesting question will be whether the sense of urgency created by these core shopping days can overcome the obstacles presented by a shorter shopping season.
10:45 a.m. ET: Shake Shack pops on bullish Goldman call
The burger chain’s stock (SHAK) is roaring in early U.S. trading as Goldman Sachs analysts, attending Shake Shack’s management presentation, walked away impressed enough to hike its price target to $115:
we walked away from their presentation, with more comfort around the potential for menu innovation (return of the Hot Chicken Sandwich, and new hot chicken nuggets, as well as vegetarian burgers) to drive better than expected comps in 2020. Additionally, their commentary around the Grubhub migration was positive, as they indicated they completed the POS integration with GRUB yet only 40% of SHAKs have fully migrated to solely GRUB in POS. We reiterate our Buy rating and see 80% upside to our 12-month price target of $115, based on our [discounted cash flow] of the long term unit opportunity.
Despite troubles integrating GrubHub as a delivery provider, Goldman thinks there’s a “strong case” for other services to take up the slack in the near term. The stock last traded above $70.
10:14 a.m. ET: S&P 500, Dow hit record highs
The three major stock indices pushed decidedly higher about a half-hour into Wednesday session. The Dow climbed back above 29,000 to a record high, and the blue-chip S&P 500 also touched a fresh record.
Here were the main moves in markets, as of 10:14 a.m. ET:
S&P 500 (^GSPC): +0.33% or +10.93 points to 3,283.36
Dow (^DJI): +0.47% or +135 points to 29,074.67
Nasdaq (^IXIC): +0.36% or +33.22 points to 9,284.55
Crude oil (CL=F): -0.43% or -$0.25 to $57.98 a barrel
Gold (GC=F): +0.33% or +$5.10 to $1,549.70 per ounce
10:00 a.m. ET: Kudlow says more tax cuts planned for 2020, CNBC reports
Larry Kudlow, National Economic Council Director and top economic adviser for President Donald Trump, told CNBC Wednesday that the White House is planning to roll out a plan for further tax cuts later this year.
The plan, dubbed “Tax Cuts 2.0,” would be intended to help middle-class economic growth, Kudlow said.
Members of the Trump administration have been floating the notion of a tax proposal to lower the “middle-class” rate since passing its 2017 tax reform law. Kudlow revitalized the idea of further tax cuts in the middle of last year, saying at the time that the considerations were just in preliminary phases.
9:32 a.m. ET: Stocks open flat
Stocks were little changed around market open Wednesday ahead of a planned signing of a U.S.-China phase one trade deal slated for 11:30 a.m. ET.
Here were the main moves in markets, as of 9:33 a.m. ET:
S&P 500 (^GSPC): +0.03% or +1.09 points to 3,284.24
Dow (^DJI): -0.06% or -16.81 points to 28,922.86
Nasdaq (^IXIC): +0.24% or +20.53 points to 9,271.21
Crude oil (CL=F): -0.26% or -$0.15 to $58.08 a barrel
Gold (GC=F): +0.6% or +$9.30 to $1,553.90 per ounce
8:34 a.m. ET: Goldman, BofA deliver mixed earnings results
Goldman Sachs (GS) and Bank of America (BAC) were the two latest banks to deliver fourth-quarter results, on the heels of record results from JPMorgan Chase and a solid performance from Citigroup reported Tuesday.
Goldman Sachs topped expectations on overall revenue but missed on fourth-quarter profit, with the bank’s costs rising due to litigation expenses and investments in technology and its newer consumer banking unit.
Bank of America posted stronger-than-expected profit, but net income in its key consumer banking unit edged down over the year prior as net interest income fell in a lower-rate environment. The bank derives more than 40% of its revenue from consumer banking.
Both Goldman and BAC posted estimates-topping fixed-income trading revenues, extending a trend seen by other big banks this week after stronger market activity at the end of last year versus 2018. Goldman Sachs’s bond-trading revenues grew 63% over last year, while Bank of America’s rose 25%.
8:30 a.m. ET: Producer prices rise less than expected in December
Producer prices in the U.S. ticked up just modestly in December, rising 0.1% for the month versus a 0.2% increase expected, according to Bloomberg-compiled consensus data. Producer prices had been unchanged in November.
Excluding more volatile food and energy prices, the Department of Labor’s producer price index also rose 0.1%, below the 0.2% increase expected. However, this still marked an increase compared to the 0.2% decline on this metric posted in November.
Wednesday’s PPI report follows data Tuesday showing just a small uptick in consumer prices in December, further indicating tame inflationary pressures.
7:36 a.m. ET: Stock futures mixed ahead of China trade deal signing
Stock futures were mixed Wednesday morning as investors awaited the signing of a phase one trade deal between the U.S. and China.
The signing ceremony is is expected to take place at the White House at 11:30 a.m. ET, with President Donald Trump signing the deal along with Chinese Vice Premier Liu He.
This comes following a report from Bloomberg Tuesday that existing tariffs on Chinese imports would remain in place for the period at least through the 2020 elections.
In a joint response to the report, Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer said that all aspects of the deal would be made public Wednesday, except for a confidential annex with detailed purchase amounts. There was no agreement in place for future tariff reductions, they said in the statement.
Here were the main moves during the pre-market session, as of 7:36 a.m. ET:
S&P futures (ES=F): 3,288.75, down 1 point or 0.03%
Dow futures (YM=F): 28,892, up 21 points or 0.07%
Nasdaq futures (NQ=F): 9,081.25, down 7 points or 0.08%
Crude oil (CL=F): $58.45 per barrel, up $0.37 or 0.64%
Gold (GC=F): $1,543.20 per ounce, down $7.40 or 0.48%