Stocks end little changed as investors consider political and trade crosscurrents
Stocks spent a quiet day trading on either side of the flat line, but not moving far from it, as investors considered trade headlines related to the U.S. and China as well as America and its nearer neighbors, the start of the Fed's last rate setting meeting of the year and the political drama unfolding as Democrats move forward with plans to vote on whether to impeach President Trump.
ECONOMIC EVENTS: In the U.S., third quarter productivity was revised up to a 0.2% decline versus the preliminary 0.3% decline estimate, while unit labor cost growth was revised sharply lower to a 2.5% pace from 3.6% previously. The NFIB small business optimism index climbed 2.2% to 104.7 in November. The Fed's FOMC began its two-day meeting, though no policy changes or surprises are expected from tomorrow's monetary policy announcement.
On the trade front, The Wall Street Journal's Lingling Wei and Bob Davis said, citing officials on both sides, that U.S. and Chinese trade negotiators are laying the groundwork for a delay of a fresh round of tariffs that the U.S. has threatened to enact on Dec. 15 if a deal had not been reached.
Outside of talks with China, CNBC's Kayla Tausche was among those reporting that a USMCA deal will be signed today, stating via Twitter that "Rep. Kevin Brady tells GOP conference that Amb. Lighthizer will sign completed deal in Mexico today, per two sources in room." The deal was formally signed this afternoon, with U.S. House Speaker Nancy Pelosi saying that the deal improves upon President Trump's initial agreement with new provisions targeting the environment and other areas. Meanwhile, Senate Majority Leader Mitch McConnell said that the parties involved won't finish the USMCA trade deal this year, according to Bloomberg
In other political news, House Democrats announced that they will vote on whether to impeach President Trump on two articles - abuse of power and obstruction of Congress. The House Judiciary Committee plans to vote on the articles this week.
TOP NEWS: Shares of Autozone (AZO) rose 6.9% following the car repair retailer's quarterly report. The earnings beat also seemed to be provide a lift to peer Advance Auto Parts (AAP), whose shares were 2.9% higher at the close.
Shares of Chewy.com (CHWY) gained 5.5% following the company's report of stronger than expected revenue for its fiscal third quarter. Also of note is the fact that the post-IPO lockup period for the online pet goods retailer expires on Wednesday, offering company insiders the first opportunity to sell their stock.
In M&A news, The Wall Street Journal reported last night that NortonLifeLock (NLOK) has drawn deal interest from several companies including rival McAfee, which is owned by Intel (INTC). McAfee has joined Permira and Advent International as possible suitors for NortonLifeLock, which is the new name for Symantec since the company closed a $10.7B deal to sell its enterprise-security business to Broadcom (AVGO) last month.
Meanwhile, Peloton (PTON) shares closed 5.7% lower after short-seller Citron Research published a critical report on the company. Andrew Left's firm said in the report that "Unless Peloton invents a piece of equipment that works out for you - this is going to $5 [which is still a $1BN-$2BN market cap]." Teasing the report, the firm said in a tweet that "we will be laughing" a year from now at the company's current $10B valuation.
Additionally, New York State Supreme Court Justice Barry Ostrager found Exxon Mobil (XOM) not guilty of fraud, saying that the New York state attorney general did not establish that the oil major had deceived its investors about how it accounted for the cost of future climate-change regulations, according to media reports. Following the news, Exxon Mobil released a statement saying that the ruling "affirms" the position the company has held throughout the New York AG's "baseless investigation."
MAJOR MOVERS: Among the noteworthy gainers was Tenneco (TEN), which rose 7.8% after the Wall Street Journal reported that Apollo Global (APO) has submitted an offer to acquire Tenneco's powertrain unit. Also higher were Avid Bioservices (CDMO) and Stitch Fix (SFIX), which gained a respective 16.6% and 4.8% after reporting quarterly results.
Among the notable losers was Designer Brands (DBI), which slid 16.4% after it reported quarterly results and cut its fiscal 2019 guidance. Also lower after reporting quarterly results were Conn's (CONN) and Construction Partners (ROAD), which fell 33.4% and 18.7%, respectively.
INDEXES: The Dow fell 27.88, or 0.10%, to 27,881.72, the Nasdaq lost 5.64, or 0.06%, to 8,616.18, and the S&P 500 declined 3.44, or 0.11%, to 3,132.52.