Stocks regained some of the losses seen yesterday as the trade rhetoric between the U.S. and China cooled off a bit and both sides said they are continuing to talk. As expected, the U.S. Trade Representative filed paperwork Monday night to move forward with work on imposing tariffs on the remaining $300B worth of Chinese imports that are not already being taxed, but President Trump reiterated that he is still undecided if he will take that added step. Media reports suggest U.S. delegates, potentially including Treasury Secretary Steve Mnuchin, could travel to Beijing soon for more talks, though a date for such a trip has not been set.
ECONOMIC EVENTS: In the U.S., import and export prices rose only 0.2% in April compared to the prior month as both came in below expectations. The NFIB's small business optimism index rose 1.7% to 103.5 in April.
In trade news, Hu Xijin, editor-in-chief of Chinese and English editions of the Global Times, tweeted that the "trade game" between the U.S. and China "may last longer than many think it will," as "both sides have resources to sustain their will."
TOP NEWS: Disney (DIS) announced a deal to assume full operational control of Hulu, effective immediately, as part of a broader agreement with Comcast (CMCSA), which still holds a 33% ownership interest in the streaming service venture. Under the agreement, Comcast can require Disney to buy NBCUniversal's interest in Hulu and Disney can require NBCUniversal to sell that interest to Disney for its fair market value as early as January 2024.
Ralph Lauren (RL) reported better than expected sales and profits in its fiscal fourth quarter, guided for net revenue growth of 2% to 3% on a constant currency basis in FY20 and raised its quarterly cash dividend by 10%. However, shares fell 3.7% as the company was highlighted by analysts as among the number of apparel retailers facing increased earnings risk from a protracted trade fight between the U.S. and China.
Facebook (FB) was in focus after Reuters reported that the company is moving toward an agreement with the U.S. government regarding its privacy policies and practices that would put the social media giant under 20 years of oversight. The deal, which would resolve an investigation on whether the company breached a similar 2011 consent pact, is not expected this week and, according to one source, the announcement of a settlement with the Federal Trade Commission could be a month away, added Reuters.
Meanwhile, Tennessee Attorney General Herbert H. Slattery III sued Endo (ENDP) for "making unlawful and false claims about the safety and benefits of its opioid products."
MAJOR MOVERS: Among the noteworthy gainers was TransEnterix (TRXC), which rose 7.9% after BTIG analyst Sean Lavin upgraded the stock to Buy with a $3 price target, calling the 40% pullback in the shares following the Q1 miss "overdone." Also higher was Take-Two (TTWO), which gained 3.5% after reporting quarterly results.
Among the notable losers was Tencent Music (TME), which slid 6.2% after reporting quarterly results and announcing the resignation of co-president Guomin Xie. Also lower was Solid Biosciences (SLDB), which fell 28.6% after the company disclosed additional safety events with the first patient treated at a new high dose in its Phase 1/2 micro-dystrophin gene therapy study in Duchenne muscular dystrophy.
INDEXES: The Dow rose 207.06, or 0.82%, to 25,532.05, the Nasdaq gained 87.47, or 1.14%, to 7,734.49, and the S&P 500 advanced 22.54, or 0.8%, to 2,834.41.