Stocks end mixed despite report of snag in U.S.-China trade talks
Stocks looked in pre-market trading like they were set for a down day as Republicans kicked off their public impeachment inquiry proceedings and Fed Chair Jerome Powell prepared to give testimony on Capitol Hill. The averages, however, came off their early lows as Powell continued to answer questions from lawmakers. A headline on a snag in trade talks with China looked like it would take the market lower as well, but the pullback was relatively brief and two of the three major averages managed to finish the day nominally higher.
ECONOMIC EVENTS: In the U.S., the headline Consumer Prices Index for October increased 0.4%, and the core rose 0.2%, with the former beating expectations.
In trade news, the Wall Street Journal reported that trade talks between the U.S. and China have hit a snag over farm purchases. While President Trump has said China has agreed to buy up to $50B in U.S. soybeans, pork and other agricultural products annually, China is leery of putting a numerical commitment in the text of a potential agreement, according to the Journal.
In central bank news, Federal Reserve Chairman Jay Powell said in written testimony prepared for his appearance today before the Joint Economic Committee that "my colleagues and I see a sustained expansion of economic activity, a strong labor market, and inflation near our symmetric 2% objective as most likely...However, noteworthy risks to this outlook remain. In particular, sluggish growth abroad and trade developments have weighed on the economy and pose ongoing risks." Powell added that he and the FOMC "see the current stance of monetary policy as likely to remain appropriate" as long as incoming information about the economy remains broadly consistent with the bank's outlook.
TOP NEWS: Disney (DIS) shares jumped 7.3% after the company announced that its Disney+ streaming service, which launched yesterday, has already achieved 10M sign-ups. Commenting on the news, Wedbush analyst Daniel Ives said that the "jaw dropping" figure is considerably higher than many on Wall Street were anticipating.
Google (GOOGL) plans to soon offer checking accounts to consumers under a project code-named Cache that is expected to launch next year with accounts run by Citigroup (C) and a credit union at Stanford University, The Wall Street Journal reported. Google's reported interest in banking comes after the recent launch of Goldman Sachs' (GS) partnership with Apple (AAPL) for the Apple Card, and also follows the Office for Civil Rights in the Department of Health and Human Services opening a federal investigation into Google and Ascension's "Project Nightingale," which amasses detailed health data of millions of patients.
Nike (NKE) will stop selling its sneakers and apparel directly on Amazon's (AMZN) website, ending a pilot program that began in 2017, Bloomberg's Eben Novy-Williams and Spencer Soper report. The move follows the naming of former eBay (EBAY) CEO John Donahoe as its next CEO. Nomura Instinet analyst Michael Baker said Nike's reported decision to stop selling product directly to Amazon should be positive for Dick's Sporting Goods (DKS), which he identifies as one of Nike's "most valuable" partners.
In M&A news, Tech Data (TECD) announced it has entered into a definitive agreement to be acquired by an affiliate of Apollo Global Management (APO) for $130 per share in a transaction with an enterprise value of approximately $5.4B. Additionally, Chesapeake Energy (CHK) shares rose 4.8% after Reuters reported that Comstock Resources (CRK) is in talks to acquire Chesapeake's Haynesville shale assets in Louisiana in a deal that could be worth more than $1B. Comstock shares were 4.3% higher after the news. Meanwhile, shares of Qiagen (QGEN) jumped 9.9% after Bloomberg reported that Thermo Fisher (TMO) is mulling an acquisition of the company and has approached it about a deal.
MAJOR MOVERS: Among the noteworthy gainers was Instructure (INST), which rose 5.1% after Bloomberg reported that the company is weighing strategic options, including a sale, after receiving pressure from activist investors. Also higher after reporting quarterly results were Cardlytics (CDLX) and Luckin Coffee (LK), which gained a respective 42.9% and 13.1%.
Among the notable losers was Intelsat (I), which slid 29.2% after JPMorgan analyst Philip Cusick downgraded the stock to Neutral from Overweight and cut his price target on the shares to $22 from $34. Also lower were SmileDirectClub (SDC) and Canadian Solar (CSIQ), which fell 20.3% and 16.3%, respectively, after reporting quarterly results.
INDEXES: The Dow rose 92.10, or 0.33%, to 27,783.59, the Nasdaq lost 3.99, or 0.047%, to 8,482.10, and the S&P 500 advanced 2.20, or 0.071%, to 3,094.04.