Dow Ends Off Highs but Optimism Remains Over a U.S.-China Trade Deal – TheStreet

Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average rose Wednesday amid optimism that U.S. and Chinese negotiators could reach a trade deal before another round of tariffs kicks in.
  • Activision Blizzard Inc. (ATVI) rose 7% after the video game maker unveiled a stock buyback and cost-cutting program that offset a weaker-than-expected profit outlook.
  • Johnson & Johnson (JNJ)  reached a deal to acquire privately held surgical robotic technologies manufacturer Auris Health for about $3.4 billion in cash.

Wall Street Overview

Stocks ended higher on Wednesday, Feb. 13, amid optimism that the-self imposed deadline for a trade deal between the U.S. and China could be extended if the two sides make progress in reaching an agreement.

Donald Trump raised the prospect of an extension to the March 2 deadline, when tariffs on $200 billion worth of China-made goods could increase to 25% from 10%.

“If we’re close to a deal where we think we can make a real deal and it’s going to get done, I could see myself letting that slide for a little while,” Trump said. “But generally speaking, I’m not inclined to do that … we’re doing very well over in China.”

The modestly softer tone, which came ahead of key talks between Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer and China Vice Premier Liu He on Thursday and Friday in Beijing, suggested the two sides see some progress on key issues such as alleged intellectual property theft and forced technology transfers that have been held as sticking points to a comprehensive agreement by officials in Washington.

Separately, Trump intends to sign the border security deal to avoid another partial government shutdown, CNN reported, citing two sources who have spoken directly with him. The deadline for Congress to pass the bill and get it signed by Trump is Friday, Feb. 15.

The Dow Jones Industrial Average was up 118 points, or 0.46%, to 25,543, the S&P 500 rose 0.3%, and the Nasdaq gained 0.08%.

The Consumer Price Index was unchanged in January, below estimates that called for an increase of 0.1%. Core CPI, which excludes food and energy prices, rose 0.2%. Consumer prices over the last 12 months rose 1.6%, down from 1.9% in December.

Activision Blizzard Inc. (ATVI) rose 7% Wednesday after the video game maker unveiled a stock buyback and cost-cutting program that offset a weaker-than-expected profit outlook for what the company called a “transition year” in 2019.

Activision Blizzard posted fourth-quarter adjusted profit of $1.29 a share, 1 cent above analysts’ estimates, on sales of $2.84 billion that missed forecasts. Activision said it expects adjusted earnings in 2019 of $2.10 a share on sales of about $6.3 billion, both of which were well shy of Wall Street forecasts.

However, the market impact was muted to a degree by Activision’s plans to purchase $1.5 billion worth of stock and cut 800 jobs — around 8% of its total workforce — as it shifts resources to game development.

Johnson & Johnson (JNJ)  rose 0.2% Wednesday after the company announced that it was purchasing privately held surgical robotic technologies manufacturer Auris Health for about $3.4 billion in cash.

J&J is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells the stock? Learn more now.

Groupon Inc. (GRPN)  tumbled 11.1% after the online marketplace posted weaker-than-expected fourth-quarter earnings, including three consecutive years of revenue declines, and forecast flat profit guidance for 2019.

Twilio Inc. (TWLO)   fell 7.3% after fourth-quarter revenue topped analysts’ estimates but earnings fell flat and it issued a weak profit outlook for the first quarter.

Generic drugmaker Teva Pharmaceutical Industries Ltd. (TEVA) reported fourth-quarter adjusted earnings of 53 cents a share, 2 cents below estimates, and said it expects full-year adjusted profit of $2.20 to $2.50 a share on sales of $17 billion to $17.4 billion, metrics that also are below forecasts. Shares fell 7.8%.

Cisco Systems Inc. (CSCO)   posted better-than-expected results for its fiscal second quarter after the closing bell Wednesday. Shares rose in after-hours trading.

Cisco is a holding in Jim Cramer’s Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells CSCO? Learn more now.

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