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Stock Market News For Feb 14, 2019

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Wall Street rally continued in Wednesday buoyed by positive developments on the trade war front. Moreover, President Trump’s statement which negated the possibility of a second government shutdown also boosted investors’ confidence. All three major stock indexes closed in the green.

The Dow Jones Industrial Average (DJI) closed at 25,543.27, rising 0.5% or 117.51 points. Meanwhile, the S&P 500 Index (INX) increased 0.3% to close at 2,753.03. The Nasdaq Composite Index (IXIC) closed at 7,420.38, gaining 0.1%. A total of 6.91 billion shares were traded on Wednesday, lower than the last 20-session average of 7.45 billion shares. Advancers outnumbered decliners on the NYSE by 1.86-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.42-to-1 ratio.  The CBOE VIX decreased 1.4% to close at 15.65. 

How Did the Benchmarks Perform?

The Dow ended in positive territory for two straight-days. Notably, 23 stocks of the 30-stocks blue-chip index finished in the green while seven ended in the red. The tech-heavy Nasdaq Composite finished in the green for four consecutive days, due to good performance by large-cap tech stocks.

The S&P 500 closed in positive territory for four successive days. The Energy Select Sector SPDR (XLE) gained 1.3%. Notably, ten out of 11 sectors of the benchmark index closed in the green while one ended in red.

Positive Developments on Trade War Front

Trade negotiations between the United States and China entered the third day on Feb 13. Both the countries are hopeful that this fresh round of negotiations would result in an amicable solution to the ongoing tariff war.

While such discussions have been termed as only working-level, U.S. Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer are expected in Beijing on Feb 14 for the next level of talks. Investors are also optimistic regarding these negotiations.

Meanwhile, on Feb 12, President Donald Trump said that he would consider extending the deadline of the current trade truce period which will come to an end on Mar 1. On Feb 13, South China Morning Post reported that Chinese President Xi Jinping is likely to meet high-level U.S. trade delegation on Feb 15 to resolve this 11 month old tariff related problem.

Consequently, shares of trade-sensitive stocks such as The Travelers Companies Inc. (TRV - Free Report) and Caterpillar Inc. (CAT - Free Report) rose 0.6% and 0.3%, respectively.  Caterpillar carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Concerns Over Government Shutdown Evaporates

On Feb 13, Trump said “I don’t think you’re going to see a shutdown.” President’s statement significantly bolstered market sentiments. Notably, on Feb 12, Republican as well Democrat Congressional leaders reached a joint agreement to allow funding for barriers along the U.S. - Mexico border. This has prevented another government shutdown. The Republicans agreed to far less an amount than initially demanded in a bid to avoid a shutdown. A sum of $1.4 billion was approved by Congress for building 55 miles of new fencing instead of a concrete wall.

President Trump had demanded $5.7 billion for the construction of a 215-mile-long concrete border across the border. Meanwhile, speaking from the White House, Trump stated, "I can't say I'm happy. I can't say I'm thrilled." Even though the deal has temporarily been approved, it is still pending Trump’s agreement. As a matter of fact, Trump has not stated he will reject the proposal.

Economic Data

The government reported that consumer price index (CPI) for the month of January remained unchanged sequentially. However, the consensus estimate was for an increase of 0.1%. Increase in CPI was 1.6% in the past 12-months compared with 1.9% in the year ago period. Core CPI (excluding food and energy items) grew 0.2% in January, in line with the consensus estimate.

Energy Information Administration (EIA) reported that the domestic crude oil supplies rose by 3.6 million barrels for the week ended Feb 8.

Stock That Made Headline

Copa Holdings Misses Q4 Earnings Estimates, Down Y/Y

Copa Holdings, S.A. (CPA - Free Report) reported disappointing fourth-quarter 2018 results, with earnings and revenues missing the Zacks Consensus Estimate. (Read More)

DaVita Q4 Earnings Beat and Revenues Miss Estimates

DaVita Inc. (DVA - Free Report) reported fourth-quarter 2018 adjusted earnings per share (EPS) of 90 cents, beating the Zacks Consensus Estimate by a penny. (Read More)

Marathon Oil's Q4 Earnings Beat on U.S. E&P Strength

Marathon Oil Corporation (MRO - Free Report) posted fourth-quarter adjusted income from continuing operations of 15 cents per share, surpassing the Zacks Consensus Estimate of 13 cents. (Read More)

Pioneer Natural Misses on Q4 Earnings, Reserves Grow

Pioneer Natural Resources Company (PXD - Free Report) reported fourth-quarter 2018 adjusted earnings of $1.18 per share, which failed to beat the Zacks Consensus Estimate of $1.40. (Read More)

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