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Stock Market News For Mar 7, 2018

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Markets ended slightly higher on Tuesday with all the major benchmarks ending in positive territory. Investors speculated about the effects of a possible trade war triggered by the imposition of import tariffs by President Trump. House Speaker Paul Ryan dissuaded Trump from moving ahead with his protectionist policies as they might not bode well for the economy. Meanwhile, North Korea has expressed its willingness to denuclearize and is eager to hold talks with the U.S and its Southern neighbor in a bid to improve relations.

The Dow Jones Industrial Average (DJI) increased 0.04% to close at 24,884.12. The S&P 500 gained 0.3% to close at 2,728.12. The tech-laden Nasdaq Composite Index closed at 7,372.01, increasing 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 8.5% to close at 20.33. Advancers outnumbered decliners on the NYSE by 1,701 to 1,098. On Nasdaq, advancing issues outnumber the declining ones by 1,692 to 1,144.

How Did the Benchmarks Perform?

The Dow added 9.4 points to end in the green on Tuesday. The blue-chip index has lost as much as 166 points earlier in the session. This fall followed a surge of 120 points in the Dow.

The S&P 500 gained 7.2 points to also end in positive territory. Of the 11 major segments of the S&P 500, nine finished in the green, with materials and consumer discretionary stocks leading the gainers. The Materials Select Sector SPDR ETF (XLB) and the Consumer Discretionary Select Sect SPDR ETF (XLY) increased 1.1% and 0.7%, respectively on Tuesday. Gains for the broader index were also supported by a 5% increase in the shares of General Motors (GM - Free Report) .

Meanwhile, the Nasdaq amassed 41.3 points to end in the green as well. Gains for the tech-laden index were supported by an increase in the shares of Netflix, Inc. (NFLX - Free Report) and Amazon.com, Inc. (AMZN - Free Report) , which gained 3.2% and 0.9%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Trade War Fears Keep Investors on Tenterhooks

On Friday, Trump said that the U.S. will impose a 25% tariff on steel imports and a 10% tariff on aluminum. Such protectionist trade measures triggered a lot of concern among corporations and consumers. Tariffs will increase the cost of companies that rely heavily on aluminum and steel, like auto and plane makers.

Trump’s contentious tariff announcement raised apprehensions about retaliation from China and other major U.S. trading partners. China cautioned America to abide by multilateral trade rules and not to harm the delicate global economy.

Trump’s plan however, faced opposition from House Speaker Paul Ryan and a few other fellow-Republicans. Ryan, in particular, cautioned Trump about the negative ramifications that the latter’s protectionist policies might have on the economy and discouraged him from pursuing such plans. Further, he openly criticized the idea of a trade war and stated that such a development would negate the overall positive impacts of the tax overhaul. Trump, however, stated that he wouldn’t be ‘backing down’ and that any imposition of new tariffs would not lead to a trade war.

Meanwhile, the President also stated that Canada and Mexico could be exempted from such tariffs if they agreed to ‘fairer’ terms of the North American Free Trade Agreement. He also commented that Canada must ensure proper treatment of “our farmers” and that Mexico should put in more effort to check the drugs from flowing into the U.S.

Trump Speculates Cohn’s Resignation

Bloomberg reported on Tuesday that President was skeptical about economic advisor Gary Cohn continuing in his role if import tariffs are imposed. Also, CNBC reported that a source close to Cohn stated that the latter was ‘contemplating’ about whether or not to continue with his current role.

Bloomberg also reported that Cohn has been working to prevent the tariffs from being imposed. He had also organized meetings between Trump and some important executives from the U.S. metals industries to discourage Trump from imposing tariffs.

North Korea Considers Denuclearization

South Korea’s presidential office announced on Tuesday that the country had agreed with its Northern counterpart to hold their first summit in the last 10 years. This news comes after a senior delegation met North Korea’s Kim Jong Un in Pyongyang on Monday, in a bid to improve strained relations between the two countries.

South Korean media also reported that the North had indicated its intent to denuclearize and would also completely stop weapons testing by the time the summit is held. The report also stated that North Korea was eager to enter into talks with the United States regarding denuclearization and improving its troubled relations with the country.

Stocks That Made Headlines

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Breaking News: Cryptocurrencies Now Bigger than Visa

The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.

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