By Chris Matthews and Barbara Kollmeyer, MarketWatch
Tesla, Netflix, American Express shares in focus
Stock-market bulls attempted to extend a winning streak to a
fourth day Friday, buoyed by news reports that stoked hopes for
progress in trade talks between the U.S. and China.
Equity markets will be closed on Monday
(http://www.marketwatch.com/story/which-stock-markets-and-bond-are-closed-for-martin-luther-king-jr-day-2019-01-18)
in observance of Martin Luther King Jr. Day.
How are benchmarks faring?
The Dow Jones Industrial Average rose 217 points, or 0.9%, to
24,585; the S&P 500 index gained 27 points, or 1%, to 2,662;
and the Nasdaq Composite added 66 points, or 0.9%, to 7,148.
For the week, the S&P and Nasdaq are each up 2.5% and the
Dow is looking at a gain of 2.4%.
Brexit Brief: General election talk grows louder in Westminster
(http://www.marketwatch.com/story/brexit-brief-general-election-talk-grows-louder-in-westminster-2019-01-18)
What's driving the market?
Upbeat expectations on trade were reinforced by a report from
Bloomberg
(http://www.marketwatch.com/story/china-has-offered-to-ramp-up-us-import-purchases-to-1-trillion-per-year-report-2019-01-18)
that Chinese officials have offered to increase imports from the
U.S. by $1 trillion over the next six years, plan that would
reportedly bring the U.S. trade deficit with China to zero by
2024.
That comes after stocks got a late lift Thursday from a report
by The Wall Street Journal
(https://www.wsj.com/articles/u-s-weighs-lifting-china-tariffs-to-hasten-trade-deal-calm-markets-11547754006?mod=hp_lead_pos1)
(https://www.wsj.com/articles/u-s-weighs-lifting-china-tariffs-to-hasten-trade-deal-calm-markets-11547754006?mod=hp_lead_pos1)
that U.S. officials were debating a possible ease in tariffs on
Chinese imports, to give Beijing incentive to make deeper
concessions over the trade dispute.
A Treasury spokesman immediately walked back the report, telling
the newspaper that any bargaining positions remained "at the
discussion stage." The source also said neither Treasury Secretary
Steven Mnuchin nor U.S. Trade Representative Robert Lighthizer have
made any specific trade-related recommendations, and talks were
still ongoing.
Meanwhile, investors continue to digest a new round of earnings
reports, like those from Netflix Inc. (NFLX), which reported strong
subscriber and profit growth
(http://www.marketwatch.com/story/netflix-earnings-and-subscriber-additions-beat-expectations-but-stock-falls-2019-01-17)
after the bell on Thursday, but missed on revenue. The stock traded
lower, but its 32% rise year-to-date reflects the glass-half-full
sentiment that has overtaken markets in recent weeks.
What are the analysts saying?
"With the shutdown slowly taking 0.1 percentage points of GDP
each week, the president knows a victory in resolving the trade war
can give him leverage on continue his battle with Democrats on his
border wall funding," wrote Edward Moya, market analyst at OANDA in
a Friday morning note.
"Yesterday's Wall Street Journal report that Treasury Secretary
Steven Mnuchin reportedly proposed the idea of lifting some or all
the tariffs gave stocks a strong bid. It was quickly refuted by the
Treasury, but story shows how anxious markets are in looking for
positive momentum to continue with trade talks," he added.
"From an earnings standpoint, results continue to be better than
feared," Tom Essaye, president of the Sevens Report wrote in a
Friday-morning note to clients. "Industrials have posted solid
results so far in earnings season, and that is a positive if it
continues throughout the rest of the season."
Meanwhile, the "market continues to act resiliently," in the
face of any bad news, like Morgan Stanley's disappointing earnings,
he wrote.
What data and Fed speakers are investors watching?
New York Fed President John Williams, a voting member of the
rate-setting Federal Open Market Committee, said that the Federal
Reserve should respond "carefully" to a U.S. economy that appears
to be slowing, in a speech to the New Jersey Bankers Association's
Economic Leadership Forum.
""But let me be clear: a softer economic outlook doesn't mean we
should prepare for doom and gloom," he added.
U.S. industrial production rose 0.3% in December, the Federal
Reserve reported Friday morning, in line with expectations, per a
MarketWatch poll of economists.
The University of Michigan's consumer confidence index fell to a
more than two-year low of 90.7 in January, down from 98.3 in
December, and well below expectations of 97.5, according to a
MarketWatch economist poll.
Philadelphia Fed President Patrick Harker, a nonvoting member of
the FOMC, will give a speech on the future of Philadelphia at 11
a.m.
Which stocks are in focus?
Tesla Inc. (TSLA) shares fell 9.1%
(http://www.marketwatch.com/story/tesla-to-cut-jobs-by-around-7-says-ceo-elon-musk-2019-01-18)after
the company announced job cuts and warned on profits.
Netflix(NFLX) shares retreated 3.3% early Friday, indicating
investor dissatisfaction with the streaming video service giant's
fourth-quarter results
(http://www.marketwatch.com/story/netflix-earnings-and-subscriber-additions-beat-expectations-but-stock-falls-2019-01-17)
and upbeat calls from Wall Street analysts
(http://www.marketwatch.com/story/netflixs-stock-drop-after-results-despite-upbeat-analyst-calls-2019-01-18).
Shares of American Express Co. (AXP) traded 0.7% lower Friday,
after the financial-services company reported mixed fourth-quarter
results
(http://www.marketwatch.com/story/american-express-swings-to-profit-narrowly-misses-revenue-expectations-2019-01-17)
Thursday evening.
SunTrust Banks Inc. (STI)stock rose 4.4% in premarket action,
after the bank reported better-than-expected profits.
Shares of Tiffany & Co.(TIF) rose 3.3%, even after the
luxury jewelry retailer reported holiday-period sales that declined
from a year ago and provided a downbeat full-year profit and sales
outlook. The stock has fallen nearly 35% over the past six
months.
Eli Lilly and Co. (LLY) stock was down 3.2% early Friday, after
the company said
(http://www.marketwatch.com/story/eli-lilly-shares-slide-premarket-on-news-of-failed-trial-for-sarcoma-treatment-2019-01-18)
a late-stage trial of a treatment for sarcoma failed to meet its
main goals.
Shares of VF Corp. (VFC) rose 11.7%, after the parent company of
Vans and The North Face reported better-than-expected earnings and
sales.
How did the benchmarks fare yesterday?
On Thursday, the Dow erased an earlier loss to rise 162.94
points, or 0.7%, to 24,370.10 in choppy trade. The blue-chip gauge
was up 267 points at its session high. The S&P 500 added 0.8%
to 2,635.96 and the Nasdaq gained 0.7% to finish at 7,084.46.
How are other markets trading?
Markets in Asia surged
(http://www.marketwatch.com/story/asian-markets-rise-on-hopes-of-progress-for-us-china-trade-talks-2019-01-17),
led by a 1.4% jump for China's Shanghai Composite Index . In
Europe, the Stoxx Europe 600 rose 1.6%.
Crude oil was also moving higher
(http://www.marketwatch.com/story/oil-prices-push-higher-on-hopes-for-us-china-trade-progress-2019-01-18),
while gold is falling
(http://www.marketwatch.com/story/gold-prices-ease-head-for-slim-weekly-loss-as-stocks-point-higher-2019-01-18)and
the U.S. dollar was steady
(http://www.marketwatch.com/story/positive-trade-sentiment-lifts-dollar-against-japanese-yen-2019-01-18).
(END) Dow Jones Newswires
January 18, 2019 11:03 ET (16:03 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.