Qualcomm shares rally on earnings beat
The Dow and S&P 500 closed at fresh records Thursday even after reports emerged of “fierce internal opposition” in Washington over a new agreement with Beijing to cancel tariffs in stages.
The benchmark Russell 2000 index of smaller, domestically-focused companies, which had been more reluctant to join the recent market rally, closed slightly higher.
How did major benchmarks perform?
The Dow Jones Industrial Average DJIA, -0.16% rose 182.24 points, or 0.66%, to a record 27,674.80, while the S&P 500 index SPX, -0.12% gained 8.4 points, or 0.27%, to an all-time high of 3,085.18. The Nasdaq Composite index COMP, -0.06% added 23.89 points, or 0.28%, to 8,434.52, its second-highest close in history, according to Dow Jones Market Data.
On Tuesday, the Dow lost less than a point to end at 27,492.50, while the S&P 500 index gained 2.16 points, or 0.07%, at 3,076.78. The Nasdaq Composite Index shed 24.05 points, 0.29%, closing at 8,410.63.
The Russell 2000 RUT, -0.23% closed up 4.45 points Thursday, or 0.26%, to 1,593.99.
What drove the market?
Major U.S. stock indexes have been setting new records in recent sessions, with investors encouraged by reports of progress on an interim trade deal between the U.S. and China.
Some of that optimism faded in afternoon trade amid reportsof “fierce internal opposition” within the White House over plans for the U.S. and China to roll back tariffs in an effort to reignite progress on the protracted trade dispute.
Early Thursday, Bloomberg News reported China and the U.S. will cancel planned tariffs on each other’s products in stages, with the first agreement due to be signed in the next few weeks. The amount of tariff relief that’s coming will depend on what’s in that deal, said Ministry of Commerce spokesman Gao Feng, according to the South China Morning Post. But by late afternoon, conflicting reports had emerged about how much ground — if any — the Trump administration had agreed to give up, according to the Wall Street Journal.
Bruce Bittles, chief investment strategist at Robert W. Baird & Co., said that recent positive comments on trade had been a catalyst for propelling stocks to record highs, but that falling Treasury bond yields also have led to an improved view about the U.S. economy.
“Bond yields are up enormously,” he told MarketWatch. “I think that’s bullish and I think that suggests that the U.S. economy is doing better.”
“In addition, perhaps the European economy, Japan and even China, maybe, have bottomed here, in terms of their economies weakening,” he added.
Investors were also eyeing developments in Europe, after the European Central Bank issued an update on economic and monetary developments that predicted sluggish but positive economic growth in the second half of 2019.
In U.S. economic data, the Labor Department estimated that 211,000 Americans filed new unemployment claims in the week ended Nov. 2, a one month-low and below the 215,000 predicted by economists polled by MarketWatch.
“We haven’t seen a list of what products would be impacted,” said Robert Pavlik, chief investment strategist at SlateStone Wealth, but added that industrials, the tech sector, semiconductors and companies doing business overseas were all benefiting from fresh optimism on the trade front.
“What you have is a market that’s essentially at all-time highs,” he told MarketWatch.
Which stocks were in focus?
Qualcomm Inc. QCOM, +0.36% reported fiscal fourth quarter earnings and sales that fell less than Wall Street had forecast Wednesday after the close, while projecting the current quarter will also result in year-over-year declines in profit and revenue. Shares rose 6.32% Thursday and have risen almost than 60% year-to-date.
Shares of Cardinal Health Inc. CAH, -0.53% rose 3.44% Thursday after reporting a $4.92 billion loss in the fiscal first quarter, due to an agreement in principle reached in October to pay $5.56 billion to settle pending and potential opioid lawsuits. Excluding these charges, earnings-per-share and revenue beat analyst forecasts.
Shares of Expedia Group Inc. EXPE, +2.38% plunged 27.39% Thursday after the travel website reported worse-than-expected earnings results after the close of trade Wednesday.
AMC Entertainment Holding Inc. AMC, +3.84% said Thursday that it recorded a net loss in the third quarter that was smaller than the year-ago period, but larger than analysts had forecast, while revenue rose. The cinema chain operator’s stock fell 4.64%.
Shares of PG&E Corp. PCG, +6.15% tumbled 13.01% after the utility swung to a third-quarter loss after it took a $2.5 billion charge for losses related to California wildfires. The embattled utility said Thursday that it anticipates those costs to escalate to as much as $6.3 billion.
Shares of Nielsen Holdings PLC NLSN, -0.30% fell less than 1% after the media measurement company beat earnings expectations for the third quarter, but also announced it was cutting its dividend by 83% and that it plans to spin off its Global Connect business as an independent, publicly traded company.
U.S.-traded shares of Baidu Inc. BIDU, +3.60% rallied 13.52% after the Chinese internet giant reported sales and earnings growth Wednesday evening that surpassed Wall Street estimates.
How are others assets trading?
The yield of the 10-year U.S. Treasury note TMUBMUSD10Y, -0.08% closed at a three-month high of 1.924% on Thursday, as trade tensions appeared to ease.
December gold GCZ19, -0.09% on Comex settledat a three-month low of $1,466.40 an ounce after a 0.6% gain a day ago.
West Texas Intermediate crude for December delivery CLZ19, -2.13% popped 1.28% amid the upbeat trade developments to $57.15 a barrel on the New York Mercantile Exchange.
The ICE U.S. dollar index DXY, +0.17% , a gauge of the greenback’s performance against six major rivals, was up 0.17%.
In Asia overnight, the China CSI 300 000300, -0.47% rose 0.18%, the Shanghai Composite SHCOMP, -0.49% was virtually unchanged. Hong Kong’s Hang Seng Index HSI, -0.70% climbed 0.57%, while Japan’s Nikkei 225 Index NIK, +0.26% added 0.11%. In Europe, the Stoxx Europe 600’s SXXP, -0.33% traded 0.37% higher.