Hopes for a resolution in the U.S.-China trade spat may help to extend the stock market’s rally

U.S. stocks rose modestly out of the gate Thursday, as all three major indices aimed to extend their winning streaks for a third day, and kick off November where it ended one of its most withering Octobers in years: on a high note.

Closely followed quarterly results after the close of regular trade from Apple Inc., the world’s largest publicly traded company by market value, may provide a more lasting impetus for investors.

Benchmarks

The Dow Jones Industrial Average DJIA was up 163 points, or 0.7%, at 25,280, while the S&P 500 SPX traded up 14 points, or 0.5%, at 2,726. The Nasdaq Composite Index COMP climbed 0.6%, or 40 points, to reach 7,348.

On Wednesday, the Dow gained 241.12 points, or 1%, to 25,115.76, the first finish above 25,000 for the blue-chip index since Oct. 23.

The S&P 500 index advanced 29.05 points, or 1.1%, to 2,711.68, climbing for two days in a row, something it had not done since its three-day winning streak that ended on Sept. 20.

The Nasdaq Composite Index rose 144.25 points, or 2%, to 7,305.90.

For October, the S&P 500 shed 6.9% for its biggest monthly decline since September 2011, while the Dow dropped 5.1% in its biggest monthly percentage fall since January 2016. The tech-heavy Nasdaq was the worst-performing major benchmark, dropping 9.2% in October for the biggest fall since November 2008.

Market drivers

After some $4 trillion was wiped from the market capitalization of American corporations in October, Apple Inc.’s AAPL quarterly results after Thursday’s close of trade may help to solidify a tenuous resurgence of bullish sentiment among investors following a bruising period.

Results from the iPhone maker will be important because the constituents of so-called FAANG names, an acronym representing a quintet of technology and internet-related stocks including Apple, Facebook Inc. FB, Amazon.com Inc. AMZN, Netlfix Inc. NFLX and Google-parent Alphabet Inc. GOOGL have be at the center of the recent market turmoil that drove the Nasdaq into correction territory for the first time in two years.

On Wednesday, upbeat results from Facebook were partly credited with providing some upward thrust for the broader market, after the social-media giant delivered a report that wasn’t as scary as Wall Street feared.

Worries about tariffs remain among investors’ biggest concerns headed into a fresh month of trade, with the U.S. and China leaders set to meet later in November in attempt to resolve differences that have festered into a tit-for-tat trade clash that many CEOs say has increased the costs of goods and services.

Larry Kudlow, President Donald Trump’s top economic adviser, told CNBC in an interview on Wednesday that a full slate of tariffs on all of Chinese imports may still be avoided: “Nothing is set in stone right now.” He said any additional tariffs would be the result of “policy talks,” not any “arbitrary timeline.”

Bloomberg News on Monday reported that the Trump administration may impose tariffs on all remaining Chinese imports in December, if November talks between the president and Chinese President Xi Jinping don’t prove fruitful.

Meanwhile, midterm elections in the U.S. on Nov. 6 will also be an important moment for stocks, with Democrats seen as likely to take control of the House while Republicans are expected to hold the Senate.

Stocks in focus

Shares of Apple AAPL were up 0.9% ahead of this afternoon’s earnings report.

Spotify Technology S.A. SPOT stock is down 11.2% in early morning trade, after the streaming music company missed analysts estimates for total monthly active users and falling revenue per user. On the plus side, the company did beat profit and revenue forecasts for the third quarter.

DowDuPont Inc. DWDP shares are rising 4% Thursday morning, following the release of a third-quarter earnings report that beat profit expectations. The firm also announced a new $3 billion stock buyback program.

Shares of Wayfair Inc. W are taking a sharp dive, down more than 17% after the firm posted a wider-than-expected, third-quarter loss Thursday morning.

Newfield Exploration Co. NFX shares are up 12.2% after Encana Corp. ECA said it would buy the firm in a stock-swap that values Newfield at $27.36 per share, or a 35% premium.

Shares of Marathon Petroleum Corp. MPC are down 1.8% in early trading, after the company reported Thursday morning that profits fell 18% in the third quarter, year-over-year.

Abiomed Inc. ABMD stock is trading up 7%, after the firm announced 37% revenue growth in the second quarter of fiscal 2019.

Shares of Hanesbrands Inc. HBI are falling 5% in early morning trade, after the firm missed third-quarter revenue estimates.

Teva Pharmaceuticals Ltd. TEVA, stock is up 5.8% after reporting earnings and revenue beats Thursday morning.

Economic data

Nonfarm productivity growth grew at a 2.1% annualized rate in the third quarter, the Labor Department reported Thursday, versus the 2% consensus estimate, according to FactSet. Unit labor costs rose by 1.2%, versus expectations of 1.1%.

The number of newly unemployed Americans seeking jobless benefits fell in the seven days ended Oct. 27 to 212,000, a touch more than the 210,000 expected by economists surveyed by MarketWatch. This figure remains at historically low levels.

At 9:45 a.m., Markit will give the latest reading of its PMI manufacturing index.

At 10 a.m., the Census Bureau will release its monthly estimate of construction spending for the month of September. At the same time the Institute of Supply Management will release its survey-based gauge of U.S. manufacturing activity.

What analysts say

“Equity markets were a sea of green yesterday, as risk appetite remained supported for another day. White House economic adviser Kudlow said that more tariffs on China are not ‘set in stone’, which may have boosted somewhat further market sentiment,” wrote Charalambos Pissouros, senior market analyst at brokerage and investment firm JFD Brokers, in a Thursday research note.

Other markets

Asian stocks generally rose Thursday, with only the Nikkei NIK losing ground, down 1%. European stocks are trading higher Thursday, with the Stoxx Europe 600 SXXP up 0.6% on the day.

Oil ticked higher, after October registered as the commodity’s worst month in two years. The dollar index edged down, while gold prices are rising Thursday.

Article was originally published by Mark DeCambre and Chris Matthews at marketwatch.com

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