Stocks opened higher and remained there throughout the session. The market drifted during the opening hour but received a boost from a report that said China had offered a pathway to closing the trade balance between it and the U.S. The buyers emerged and pushed the market to a broad-based advance of more than 1%. The market closed out its fourth consecutive weekly advance, which has lifted the averages out of correction territory.
ECONOMIC EVENTS: In the U.S., industrial production rose 0.3% in December, as expected, boosting capacity utilization to 78.7%. The University of Michigan's preliminary consumer sentiment reading for January plunged 7.6 points to 90.7, which was much weaker than the 96.8 reading that was expected.
On the trade news front, Bloomberg reported, citing officials familiar with the negotiations, that China offered to increase annual goods imports from the U.S. by a combined value of more than $1 trillion over six years in order to eliminate the trade balance between the two countries. However, the offer, made during talks in Beijing earlier this month, was met with skepticism by U.S. negotiators who want the trade gap to close even sooner, sources told Bloomberg.
In energy news, Baker Hughes reported that the U.S. rig count is down 25 rigs from last week to 1,050 rigs.
COMPANY NEWS: Shares of Tesla (TSLA) fell almost 13% after a memo to employees from CEO Elon Musk revealed the electric carmaker is cutting its full-time workforce by 7%. Musk also said in the memo that preliminary, unaudited results for the fourth quarter indicate Tesla made a "tiny profit," but that the profit was lower than in the third quarter.
After warning earlier this week that Walmart (WMT) had opted to leave the CVS Caremark pharmacy benefit management commercial and Managed Medicaid retail pharmacy networks, CVS Health (CVS) and Walmart announced this morning that the companies have reached a multi-year agreement on terms under which Walmart will continue participating in the PBM networks.
Shares of Netflix (NFLX) were 4% lower after the streaming service reported quarterly results last night, with fourth quarter revenue missing Wall Street estimates and its earnings and revenue view for the coming quarter also falling short of consensus forecasts. Despite the revenue miss, multiple analysts maintained Buy-equivalent ratings on the stock and even raised their price targets, with several highlighting strong subscriber additions.
Meanwhile, the Washington Post reported that U.S. regulators met to discuss potentially levying a record-setting fine against Facebook (FB) for violating a legally binding pact with the government to protect the privacy of its users' personal information.
Additionally, Bloomberg reported that Apple (AAPL) has been ordered to stop using part of a press release that claims that all iPhones would still be available in Germany through phone companies and resellers after it was banned from distributing several versions of the product in the country. Qualcomm (QCOM), which won an iPhone ban last month, was awarded a preliminary injunction stopping its rival from using a statement that Apple distributed to the press in response to the initial ruling, Bloomberg said.
MAJOR MOVERS: Among the noteworthy gainers was Floor & Decor (FND), which rose 7.7% after UBS analyst Michael Lasser upgraded the stock to Buy and raised his price target on the shares to $37 from $29. Also higher were Bank OZK (OZK) and VF Corp. (VFC), which gained 16.2% and 12.4%, respectively, after reporting quarterly results.
Among the notable losers was Nautilus (NLS), which dropped 40.5% after its provided downbeat Q4 guidance and said it is embarking on an "aggressive cost-containment program." Also lower was Eli Lilly (LLY), which slipped 2.2% after reporting that a Phase 3 study of Lartruvo in combination with doxorubicin in patients with advanced or metastatic soft tissue sarcoma did not meet the primary endpoints of overall survival, or OS, in the full study population or in the leiomyosarcoma sub-population.
INDEXES: The Dow rose 499.19, or 2.06%, to 24,706.35, the Nasdaq gained 72.76, or 1.03%, to 7,157.23, and the S&P 500 advanced 33.83, or 1.28%, to 2,669.79.
Tesla
-45.18 (-13.00%)
Walmart
+1.01 (+1.04%)
CVS Health
+2.13 (+3.36%)
Netflix
-14.02 (-3.97%)
Ticker changed to META
+1.77 (+1.19%)
Apple
+0.99 (+0.64%)
Qualcomm
+0.44 (+0.80%)
Floor & Decor
+2.34 (+7.89%)
Bank OZK
+4.47 (+16.20%)
VF Corp.
+9.135 (+12.47%)
Nautilus - now BFX
-4.76 (-40.48%)
Casa Systems
-3.17 (-22.01%)