US Stocks Post Modest Gains 02/20 15:56
Wall Street capped another day of listless trading Wednesday with a slight
gain, extending the market's winning streak to a third day.
(AP) -- Wall Street capped another day of listless trading Wednesday with a
slight gain, extending the market's winning streak to a third day.
Financial, materials and industrial companies accounted for much of the
gain, outweighing losses in health care and real estate stocks as investors
reviewed the latest batch of company earnings reports.
Garmin, maker of fitness trackers and navigation technology, rose after
reporting better sales. CVS Health slumped after the pharmacy operator gave a
2019 outlook that fell short of Wall Street's expectations.
Stock indexes spent much of the day wavering between small gains and losses
as traders waited for signs of progress in the latest round of trade talks
between the U.S. and China.
"Investors are a bit concerned that we might indeed be slipping into an
earnings recession," said Sam Stovall, chief investment strategist at CFRA.
"They're really sitting on pins and needles as it relates to the trade talks."
The benchmark S&P 500 index, which has risen for the past three weeks,
gained 4.94 points, or 0.2 percent, to 2,784.70. The Dow Jones Industrial
Average added 63.12 points, or 0.2 percent, to 25,954.44.
The Nasdaq composite rose 2.30 points, or 0.03 percent, to 7,489.07. The
Russell 2000 index of smaller companies picked up 7.19 points, or 0.5 percent,
Major European indexes finished higher.
Roughly 84 percent of S&P 500 companies have reported results for the last
three months of 2018, delivering earnings growth of about 13 percent versus a
year earlier, according to FactSet. First-quarter snapshots are expected to
result in a 2.7 percent decline in earnings, however.
Despite the solid profit growth in the last quarter, investors are cautious
about business conditions going forward as signs of weakness in the global
economy emerge. Europe and China have both reported slower growth.
Uncertainty over the costly trade dispute between the world's largest
economies has clouded the outlook for company profits this year.
"The earnings (outlook) reductions have been the result of the trade
disagreement between China and the U.S.," Stovall said. "Should that get
resolved, we could see a reversal of that trajectory."
The Trump administration was set Thursday to resume high-level talks with
Chinese officials after two days of preliminary talks by lower-level officials.
The two sides, aiming to ease a trade standoff that's unnerved global
investors and clouded the outlook for the world economy, held talks in Beijing
last week. U.S. officials said those talks made some progress on difficult
issues such as China's blueprint for making its industries world leaders in
advanced technologies such as robotics and artificial intelligence.
The Trump administration has raised tariffs on billions of dollars' worth of
Chinese goods and the U.S. is due to increase them on March 2, following a
90-day truce to allow time for the negotiations now underway. President Donald
Trump has indicated the deadline might be extended if progress is being made.
Investors continued to assess corporate report cards Wednesday.
Garmin jumped 17 percent after reporting better sales and profit margins in
the fourth quarter. The company's latest forecast came in ahead of financial
analysts' projections. The stock led all others in the consumer discretionary
sector, which includes retailers, automakers and restaurant chains.
La-Z-Boy surged 11.8 percent after the furniture company's latest quarterly
earnings and revenue exceeded analysts' forecasts. The company benefited from
higher average spending. Recent acquisitions also helped boost La-Z-Boy's
Cadence Design Systems climbed 4.6 percent after the software and
engineering services company's latest quarterly results topped Wall Street's
forecasts. The stock was the technology sector's biggest gainer.
CVS Health slumped 8.1 percent after the pharmacy operator issued a 2019
outlook that fell short of analysts' estimates. CEO Larry Merlo said in a
prepared statement that 2019 would be "a year of transition" as the company
integrates the health insurer Aetna, which it purchased in a roughly $69
billion deal last year. A federal judge is still evaluating the acquisition.
The Wednesday afternoon release of the minutes from the Federal Reserve's
meeting of policymakers last month didn't hold any big surprises for investors.
Traders typically review the minutes in hopes of gleaning new insight into
the central bank's interest rate policy. At the meeting last month, Fed
officials kept the central bank's benchmark interest rate steady and, in a
significant shift, sent a strong signal that they saw no need to raise rates
anytime soon. That change helped drive the stock market higher in January.
Oil prices rebounded after an early slide. U.S. benchmark crude rose 1.5
percent to settle at $56.92 a barrel in New York. Brent crude, the standard for
international oil prices, gained 0.9 percent to close at $67.08 a barrel in
Bond prices fell. The yield on the 10-year Treasury note rose to 2.65
percent from 2.64 percent late Tuesday.
The dollar rose to 110.84 yen from 110.66 yen on Tuesday. The euro
strengthened to $1.1350 from $1.1340.
Gold added 0.2 percent to $1,347.90 an ounce. Silver gained 1.3 percent to
$16.18 an ounce. Copper jumped 1.6 percent to $2.92 a pound.
In other energy futures trading, wholesale gasoline climbed 2.2 percent to
$1.60 a gallon. Heating oil added 1.2 percent to $2.02 a gallon. Natural gas
dropped 1 percent to $2.64 per 1,000 cubic feet.