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Stock Market News For Jan 18, 2019

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Benchmarks ended in the green on Thursday, extending the streak of gains to three days on the trot. Gains were triggered by a Wall Street Journal report according to which officials from the United States were considering lifting tariffs on Chinese goods.

Such developments sent trade sensitive sectors like industrials and materials higher, boosting overall markets. Meanwhile, investors closely followed prime minister Theresa May’s next step after she survived the vote of no confidence on Wednesday.

The Dow Jones Industrial Average (DJI) increased 0.7%, to close at 24,370.10. The S&P 500 increased 0.8% to close at 2,635.96. The tech-laden Nasdaq Composite Index closed at 7,084.46, gaining 0.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 6.1% to close at 17.88. A total of around 7.19 billion shares were traded on Tuesday, lower than the last 20-session average of 8.58 billion shares. Advancers outnumbered decliners on the NYSE by a 2.45-to-1 ratio. On Nasdaq, a 1.69-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow added 162.9 points to end the session in the positive territory. The biggest gainers for the 30-stock index were Boeing (BA - Free Report) , Caterpillar (CAT - Free Report) and Apple (AAPL - Free Report) , shares of which gained 2%, 2.2% and 0.6%, respectively. At its session high, the Dow rose more than 250 points. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the S&P 500 gained 19.9 points to also end the day in the green. All of the 11 major sector of the S&P 500 ended the day in the green, with industrials and materials sectors leading the advancers. The Industrial Select Sector SPDR ETF (XLI) and Materials Select Sector SPDR ETF (XLB) gained 1.7% and 1.8%, respectively.

The Nasdaq added 49.8 points to end in the positive territory. Gains for the three major benchmarks were triggered after positive developments in the U.S. – China trade negotiations.

U.S. Considers Abolishing Certain Tariffs on China

According to a report published on the Wall Street Journal, U.S. Treasury Secretary Steven Mnuchin has proposed lifting tariffs on Chinese goods during the next round of trade negotiations with the Asian giant. The reason behind such a move is to receive fair tariff concessions from China as well as to stabilize stock markets.

However, the report stated that U.S. Trade Representative Robert Lighthizer opposed the proposal, stating that such a move would make the United States appear weak before China. Despite opposition from Lighthizer, trade sensitive stocks skyrocketed and boosted the overall markets.

For the record, a Treasury spokesman later stated that neither Mnuchin nor Lighthizer had made any suggestions “with respect to tariffs or other parts of the negotiation with China.”

Banking Woes Continue

Shares of Morgan Stanley (MS - Free Report) dipped 4.4% after reporting dismal earnings in the fourth quarter 2018. The company posted adjusted earnings of 73 cents per share, which lagged the Zacks Consensus Estimate of 90 cents. The figure also reflected 13% decline from the prior-year quarter.

Dismal underwriting (both equity and fixed income) revenues (down 25%) and fixed income trading revenues (down 30%) hurt Morgan Stanley’s quarterly results. Additionally, net interest income recorded a fall. (Read More)

May’s Next Move after Surviving Vote of No Confidence?

Due to the rejection of British prime minister Theresa May’s Brexit plans by Mar 29, a vote of no confidence was initiated by the parliament which her government managed to survive. The defeat by a margin of 432-202 has been the biggest ever faced by any British government since the 1920s. Further, this development has also made it increasingly difficult for the country to leave the European Union (EU).

May and U.K. leader of the opposition Jeremy Corbyn of the Labour Party are at loggerheads with each other. While the former wants to leave the EU, the latter wouldn’t agree to the proposal without a proper deal. So far, May has not given in to Corbyn’s demands. However, May’s actions post surviving the vote of no confidence waits to be seen.

Investors Keenly Follow Developments Related to Huawei

Market watchers also closely followed news that federal prosecutors had launched a probe in to the China’s Huawei Technologies Co. The investigation is related to allegations that the Chinese company has been stealing trade secrets from America. Analysts opine that such developments might have negative ramifications for the U.S.- China trade negotiations.

Economic Data

On the data front, the Federal Reserve Bank of Philadelphia’s manufacturing index for the current month increased to 17, an uptick from 9.1% the bank had reported for December. Meanwhile, initial claims for the week ending Jan 12, reduced to 213,000 claims.

Stocks That Made Headlines

Baxter Gains From Sharesource's Global Success Rates

Baxter International Inc. (BAX - Free Report) has announced that its coveted Sharesource remote patient management platform performed more than 5 million home peritoneal dialysis ("PD") treatments globally. (Read More)

J.B. Hunt Stock Up 6% on Q4 Earnings & Revenue Beat

J.B. Hunt Transport Services, Inc. (JBHT - Free Report) performed impressively in the fourth quarter of 2018, delivering better-than-expected earnings per share and revenues. (Read More)

Cerner Picked by Remi Vista for Behavioral Health Technology

Cerner Corporation (CERN - Free Report) announced that Remi Vista selected Cerner Integrated — a behavioral-specific electronic health record technology — to improve the mental well-being of the people across its facilities in Northern California. (Read More)

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