Stocks climbed despite a worse than expected reading from ADP on job growth and a slide in oil prices as investors became more hopeful that the U.S. will not go through with President Trump's threat to place new tariffs on goods imported from Mexico. President Trump stoked the optimism by claiming that Mexico wants to make a deal and that he may know more shortly. VP Mike Pence and the Secretary of State are meeting with Mexican officials today and Senator Chuck Grassley said that a deal is possible Thursday, according to Reuters.
ECONOMIC EVENTS: In the U.S., the ADP private payroll survey showed jobs increased only 27,000 in May, which was down from 271,000 in April and a big miss compared to the consensus forecast for 185,000 job additions. The final Markit services PMI was unrevised at 50.9, down from 53.0 in April. The non-manufacturing ISM index for May came in at 56.9, bouncing 1.4 points from last month and better than the 55.4 forecast.
In Fed news, The U.S. Federal Reserve said in its latest Beige Book that economic activity expanded at a "modest pace" from April through mid-May, with almost all Districts reporting "some growth." The Fed added that employment continued to increase nationwide, though stronger employment growth continued to be constrained by tight labor markets.
TOP NEWS: Shares of Salesforce (CRM) rose just over 5% after the company reported quarterly results that CEO Marc Benioff said he was "thrilled with." Salesforce "bucked investor fears" last night with its "strong" fiscal Q1 results, Jefferies analyst John DiFucci said.
Campbell Soup (CPB) also rallied after earnings, with the soup and packaged foods maker gaining 10% after its better than expected quarterly report and guidance hike.
Meanwhile, GameStop (GME) shares plunged 35.5% after the company reported sales below expectations in Q1 due to hardware declines and continued weakening of used product sales. The game retailer also said it will eliminate its dividend payments.
Mallinckrodt (MNK) shares were in focus after the company announced an agreement in principle with the U.S. Department of Justice under which it expects to pay $15.4M to resolve the previously disclosed investigation of Questcor's legacy sales and marketing activities. "While the agreement will not contain any admission of wrongdoing, it believes the agreement is fair and reasonable under the circumstances, and should put to rest these government claims relating to Questcor's sales and marketing activities," Mallinckrodt said.
Additionally, the Wall Street Journal reported that the Justice Department has opened a formal review of music-licensing rules that have been in place since 1941, a process that "could shake up how businesses, broadcasters and digital streaming services secure rights from songwriters and publishers." Publicly traded companies involved in music streaming include Spotify (SPOT), Sirius XM (SIRI), Apple (AAPL), and Amazon (AMZN).
MAJOR MOVERS: Among the noteworthy gainers was Cronos Group (CRON), which rose 10.9% after BofA Merrill Lynch analyst Christopher Carey double upgraded the stock to Buy from Underperform and raised his price target for the shares to $20 from $13. Also lower was Vera Bradley (VRA), which gained 1.7% after reporting quarterly results.
Among the notable losers was InflaRx (IFRX), which plummeted 91.8% after the IFX-1 Phase IIb study in hidradenitis suppurativa patients did not meet its primary endpoint. Also lower was Pivotal Software (PVTL), which fell 41.3% after reporting quarterly results.
INDEXES: The Dow rose 207.39, or 0.82%, to 25,539.57, the Nasdaq gained 48.36, or 0.64%, to 7,575.48, and the S&P 500 advanced 22.88, or 0.82%, to 2,826.15.