By Sue Chang and Chris Matthews, MarketWatch
Optimism remains over potential China-U.S. trade deal
U.S. stocks rallied midday Tuesday, with the Dow Jones
Industrial Average gaining more than 300 points, after lawmakers
reached a tentative deal to prevent a government shutdown and as
optimism grew over a potential trade deal between the U.S. and
China.
How are major indexes faring?
The Dow climbed 333 points, or 1.3%, to 25,386, while the
S&P 500 index added 32 points, or 1.2%, to 2,742. The Nasdaq
Composite Index advanced 95 points, or 1.3%, to 7,403.
Read: Morgan Stanley warns of a looming earnings recession
(http://www.marketwatch.com/story/stock-market-may-be-in-for-a-rude-awakening-as-profits-dry-up-warns-strategist-2019-02-11)
What's driving the market?
Democratic and Republican lawmakers reached a deal
(http://www.marketwatch.com/story/lawmakers-reach-border-security-deal-that-would-avert-shutdown-2019-02-11)
late Monday to avert another damaging government closure after GOP
negotiators agreed to a border-security deal that will involve far
less money for an extension of the southern U.S. border wall than
President Donald Trump has been demanding.
The tentative agreement, which involves 55 miles of new border
fencing, still requires approval from Trump, who reportedly is not
"thrilled"
(http://www.marketwatch.com/story/trump-not-thrilled-with-border-security-deal-2019-02-12)
but stopped short of saying he will reject it.
Bilateral trade negotiations entered a second day in Beijing,
with Treasury Secretary Steven Mnuchin and U.S. Trade
Representative Robert Lighthizer due to arrive Thursday for more
high-level discussions. A 12:01 a.m. Eastern time March 2 deadline
is looming for an agreement to be struck between the two
countries.
Meanwhile, investors digested a new batch of earnings releases
as fourth-quarter earnings season entered its final stretch.
The National Federation of Independent Businesses small business
index fell 3.2 points to 101.2
(https://www.nfib.com/surveys/small-business-economic-trends/), the
lowest level since the weeks leading up to the 2016 presidential
election, though above its historical average of 86.
The number of job openings in the U.S. reached an all-time high
of 7.3 million in December while the share of Americans quitting
there jobs held steady at 2.3%, according to the Labor
Department.
At 12:45 p.m. Fed Chairman Jerome Powell will give a speech on
rural economic policy at Mississippi Valley State University.
What are analysts saying?
"The relief from avoiding another government shutdown, and
speculation that something will happen with China, is helping push
markets higher, though I'm surprised at this reaction, given that
Trump has not yet said he'd sign the deal," Larry Benedict, chief
executive of the Opportunistic Trader told MarketWatch.
"The S&P 500 is pushing up against the 2,735 resistance
level that we've hit several times. There may be more on the
upside, but we could also be seeing some topping action at these
levels," he said.
What stocks are in focus?
Coty Inc. (COTY) jumped 14% after JAB holdings announced its
plans to commence a tender offer to acquire 150 million shares of
the company at a price of $11.65 a share, versus Monday's closing
price of $9.66 per share.
Shares of Molson Coors Brewing Co. (TAP) slid 9.4% after the
beer maker reported higher-than-expected, fourth-quarter earnings
(http://www.marketwatch.com/story/molson-coors-stock-drops-after-profit-beats-but-sales-miss-as-us-volume-fell-2019-02-12)
but missed Wall Street's revenue forecasts.
Ellie Mae Inc. (ELLI) soared 21% after the company agreed to be
acquired by private-equity firm Thoma Bravo in a deal worth $3.7
billion.
Under Armour Inc. (UAA) shares gained 6% after the company beat
earnings and revenue estimates
(http://www.marketwatch.com/story/under-armour-shares-climb-premarket-after-earnings-beat-2019-02-12)
for the fourth quarter.
Shares of Gilead Sciences Inc. (GILD) fell 4.4% after the
pharmaceutical company announced Monday evening that a late-stage,
placebo-controlled study designed to evaluate a type of chronic
liver disease drug, Selonsertib, didn't meet its desired outcome
(http://www.marketwatch.com/story/gilead-stock-down-nearly-4-as-drug-trial-fizzles-2019-02-11).
US Foods Holding Corp. (USFD) dropped 4.3% after the company
reported fourth-quarter earnings that fell short of Wall Street
forecasts.
Shares of Electronic Arts. Inc. (EA) rose 4.6% after the
videogame publisher announced that its new game
(http://www.marketwatch.com/story/electronics-art-stock-pops-after-detailing-early-apex-legends-popularity-2019-02-11),
"Apex Legends," had attracted 25 million new players in its first
week of availability.
TripAdvisor Inc. (TRIP) and Activision Blizzard Inc. (ATVI) are
due to report earnings after the market closes.
How are other markets trading?
In Asia
(http://www.marketwatch.com/story/asian-markets-gain-as-investors-pin-hopes-on-us-china-trade-talks-2019-02-11),
the Nikkei 225 index jumped 2.6% and the Shanghai Composite rose
0.6%. The Stoxx Europe 600 also gained while the U.K.'s FTSE 100
edged lower
(http://www.marketwatch.com/story/london-lifted-as-us-shutdown-threat-eases-tui-under-pressure-2019-02-12).
Crude oil rose, while gold was generally flat
(http://www.marketwatch.com/story/gold-prices-recover-as-dollars-win-streak-is-in-jeopardy-2019-02-12)
and the U.S. dollar fell against its peers
(http://www.marketwatch.com/story/dollar-on-track-to-break-8-day-win-streak-2019-02-12).
--Barbara Kollmeyer contributed to this article
(END) Dow Jones Newswires
February 12, 2019 12:59 ET (17:59 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
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