Stocks opened higher as investors grew optimistic about trade talks between the U.S. and China this weekend at the G20 meeting in Argentina. The market continued to drift higher throughout the morning, but still moved in a fairly narrow range. The upside move has gained some momentum after Fed Chair Jerome Powell said the central bank "will be paying very close attention to what incoming economic and financial data are telling" them about the impact of continued rate hikes.
ECONOMIC EVENTS: In the U.S., the Q3 GDP growth estimate was left at a 3.5% pace, unchanged from the government's advance report. The advance indicators report revealed a surprising widening in the trade gap for goods, with the deficit widening to $77.2B in October to set a new record. The Richmond Fed's manufacturing index dipped 1 point to 14 in November, which was weaker than forecast. New home sales plunged 8.9% to a 544,000 rate in October, which was also weaker than expected. In his speech today at the Economic Club of New York, Federal Reserve Chairman Jerome Powell plans to state, according to his prepared remarks, that the central bank knows that "the economic effects of our gradual rate increases are uncertain, and may take a year or more to be fully realized." Powell added: "While FOMC participants' projections are based on our best assessments of the outlook, there is no preset policy path. We will be paying very close attention to what incoming economic and financial data are telling us. As always, our decisions on monetary policy will be designed to keep the economy on track in light of the changing outlook for jobs and inflation."
COMPANY NEWS: Shares of Salesforce (CRM) rose 6% after the cloud software company reported better than expected third quarter results and raised guidance for 2019. Following the report, CEO Mark Benioff stated in an interview on CNBC that the company has “never been stronger or been in a better position.”
Moving in the opposite direction after earnings, shares of Tiffany & Co (TIF) dropped 12% after the luxury goods retailer's sales lagged Street forecasts Comparable store sales grew just 3% excluding foreign exchange, largely due to a decrease in spending by Chinese tourists.
MAJOR MOVERS: Among the noteworthy gainers was Wayfair (W), which rose 14% after it said its direct retail sales for the recent five-day holiday weekend were up 58% compared to last year. Also higher was BrightView (BV), which gained 11% after reporting quarterly results.
Among the notable losers was Western Digital (WDC), which slid 4% after the company announced that CFO Mark Long will step down to "pursue opportunities as a private equity investor." Also lower was Chico's (CHS), which fell 36% after reporting quarterly results.
INDEXES: Near midday, the Dow was up 444.68, or 1.8%, to 25,193.41, the Nasdaq was up 113.22, or 1.6%, to 7,195.92, and the S&P 500 was up 38.63, or 1.44%, to 2,720.80.
Salesforce
+3.78 (+2.90%)
Tiffany
-12.03 (-11.46%)
Wayfair
+12.06 (+13.17%)
BrightView
+1.3 (+11.03%)
Western Digital
-2.36 (-4.85%)
Chico's
-2.6 (-35.52%)