Stocks ended higher in a choppy session of trading as investors considered a wave of conflicting updates on U.S.-China trade negotiations and a mixed set of new domestic economic data.
The S&P 500 (^GSPC) reversed course and rose 0.36%, or 10.07 points, as of market close. The Dow (^DJI) rose 0.36%, or 91.87 points, while the Nasdaq (^IXIC) advanced 0.34%, or 25.79 points.
U.S. Treasury yields were mostly higher, with the 10-year yield up 1.7 basis points to 2.389% and the 3-month yield little changed at 2.437% as of Thursday afternoon. Treasurys have been in focus since the end of last week following an initial inversion of the 10-year and 3-month yields, with many investors viewing inversions between longer and shorter Treasury maturities as a recessionary harbinger.
Equities largely got a boost following a Reuters report that China looked willing to make concessions on trade deal sticking points including forced technology transfer. China has reportedly offered a proposal that would address these concerns ahead of meetings between U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, who arrive in Beijing on Thursday.
However, some optimism surrounding the trade talks was dashed after White House economic advisor Larry Kudlow said in a speech in Washington, D.C., on Thursday that trade talks with China were “not time-dependent” and could last for “months.”
European equities were mostly lower as the UK Parliament remained in a deadlock over a Brexit deal, even after members of Parliament seized control of the Brexit process from prime minister Theresa May and put forth eight options to move forward. May offered to resign from office early if MPs ratify her twice-defeated Brexit deal as a newly extended April 12 Brexit deadline fast approaches.
The British pound fell to below $1.31 against the dollar (GBPUSD=X) on Thursday, while the euro held under $1.13 against the dollar (EURUSD=X).
Throughout the day, investors will also hear from four Federal Reserve speakers, who will deliver remarks further discussing central bankers’ views of the domestic economy. The speakers, whose policy leanings tilt neutral to dovish, are all voting members on this year Federal Open Market Committee.
Thursday’s lineup of Fed speakers include Randal Quarles, vice chair of supervision; Vice Chairman Richard Clarida; New York Fed President John Williams and St. Louis Fed President James Bullard.
The speakers’ remarks are largely expected to reinforce the Federal Reserve’s patient posturing and decision last week to hold benchmark interest rates at the current level of between 2.25% and 2.5% amid more tepid economic conditions and muted inflation risks.
Economy
Fourth-quarter gross domestic product in the U.S. was downwardly revised to 2.2%, from 2.6% in the previous fourth-quarter estimate, according to the Commerce Department’s latest release Thursday. Consensus estimates believed the Commerce Department would downwardly revise GDP to 2.3% in its third estimate, according to Bloomberg data. Downwardly revised consumer, state and local government and business spending contributed in part to the weaker reading. GDP had grown at an annualized pace of 3.4% in the third quarter and 4.2% in the fourth quarter of 2018. Full-year growth for 2018 now stands at 2.9%, down from 3.1% after the previous fourth-quarter print.
Initial jobless claims fell more-than-expected for the week ending March 24, the Department of Labor reported Thursday. New unemployment claims declined to a seasonally adjusted 211,000 for the week, from a downwardly revised 216,000 the week prior. This brought the latest 4-week moving average down by 3,250 to 217,250.
Continuing jobless claims also came in lighter-than-expected at 1.756 million for the week ending March 16. Consensus estimates were for a reading of 1.778 continuing unemployment claims for the week. Continuing claims for the week prior were downwardly revised to 1.743 million, from 1.750 million previously.
Stocks
Facebook (FB) was sued by the U.S. Department of Housing and Urban Development on Thursday over alleged discriminatory advertising practices. The agency said in a statement it is charging Facebook with “encouraging, enabling, and causing housing discrimination through the company’s advertising platform” in violation of the Fair Housing Act. Facebook said in response that it was “surprised by the HUD’s decision,” as it has been working with them to address concerns and has “taken significant steps to prevent ad discrimination.” The HUD’s latest charge comes following an initial complaint filed last August.
Lululemon Athletica (LULU) beat Wall Street’s expectations in holiday quarter results reported after market close on Wednesday. The yoga apparel-maker delivered adjusted earnings of $1.85 per share, beating expectations of $1.74 per share, while revenue of $1.17 billion was $20 million ahead of consensus estimates. Lululemon also delivered strong full-year guidance and said it sees adjusted earnings of between $4.48 to $4.55 per share, above consensus expectations for $4.41. Lululemon’s board also announced it had authorized a $500 million share buyback program.
PG&E (PCG) is reportedly being targeted by a consortium of distressed debt firms seeking to lift the company out of bankruptcy, according to a Bloomberg report Wednesday citing unnamed people familiar with the matter. Pacific Investment Management, Elliott Management and Davidson Kempner Capital Management are holding meetings with California lawmakers and stakeholders about the proposal, which is said to be aimed at creating a $14 billion cash trust in order to help cover PG&E’s claims for wildfires in 2017 and 2018, Bloomberg reported.
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Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck
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