Stocks opened in positive territory and tacked on gains throughout the morning. The strength has been at least partially attributed to comments from the Fed Chair last night after he met with the President and affirmed that future monetary policy would be dictated by data. The dovish comments, along with continued strength in earnings reports, has prompted another day of rallying for stocks ahead of tonight's State of the Union address.
ECONOMIC EVENTS: In the U.S., Markit's final services PMI for January declined 0.2 points from the prior month to 54.2, consistent with the flash reading. The ISM nonmanufacturing index dropped 1.3 points to 56.7 in January following a 2.4 point decline in December.
The Federal Reserve said in a statement last night, "At the President's invitation, Chair Powell and Vice Chair Clarida joined the President and the Treasury Secretary for an informal dinner tonight in the White House residence, to discuss recent economic developments and the outlook for growth, employment and inflation. Chair Powell's comments in this setting were consistent with his remarks at his press conference of last week. He did not discuss his expectations for monetary policy, except to stress that the path of policy will depend entirely on incoming economic information and what that means for the outlook. Finally, Chair Powell said that he and his colleagues on the FOMC will set monetary policy in order to support maximum employment and stable prices and will make those decisions based solely on careful, objective and non-political analysis."
COMPANY NEWS: Class A shares of Alphabet (GOOGL) are down about 1% at midday after the quarterly report from Google's parent company revealed continuing pressure on advertising prices and decreasing margins, although the company reported better than expected revenue and earnings. While most Wall Street analysts reiterated buy-equivalent ratings on the stock and remained positive on the company’s outlook, price target adjustments were mixed as well, with some moving higher and some moving lower.
Shares of Gilead (GILD) are sliding 2% after the drugmaker reported Q4 operating results. Citi analyst Robyn Karnauskas. who lowered her price target for Gilead shares to $100 following the company's Q4 results, said the company's 2019 guidance anticipates double-digit year-over-year HIV growth and hepatitis C virus stabilization, adding that she awaits the company's Phase 3 readouts.
Oil major BP (BP) reported better than expected sales and profits in the fourth quarter, which it said was driven by "strong operating performance across all business segments." Near noon, BP shares trading in New York are up 3.5%.
MAJOR MOVERS: Among the noteworthy gainers was Etsy (ETSY), which rose 9% after KeyBanc analyst Edward Yruma said his firm's proprietary credit and debit card database indicates that indexed spending trends at Etsy accelerated in the month of January. Also higher were Estee Lauder (EL) and Ralph Lauren (RL), which gained a respective 12% and 7% after reporting quarterly results.
Among the notable losers was SunCoke Energy (SXC), which fell 8% after it agreed to acquire all units of SunCoke Energy Partners (SXCP). Also lower were Control4 (CTRL) and Glu Mobile (GLUU), which declined 18% and 11%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 130.09, or 0.52%, to 25,369.46, the Nasdaq was up 37.81, or 0.51%, to 7,385.35, and the S&P 500 was up 6.71, or 0.25%, to 2,731.58.
Alphabet
-9.57 (-0.84%)
Gilead
-1.36 (-1.94%)
BP
+1.45 (+3.50%)
Etsy
+5.02 (+9.17%)
Estee Lauder
+16.61 (+12.21%)
Ralph Lauren
+8.96 (+7.83%)
SunCoke Energy
-0.82 (-7.52%)
SunCoke Energy Partners
+0.57 (+4.08%)
Control4
-3.85 (-18.15%)
Glu Mobile
-1.17 (-11.47%)
Alphabet
-5.74 (-0.51%)