By Sue Chang and Chris Matthews, MarketWatch
ISM manufacturing index shows slowest pace of expansion in more
than two years.
U.S. stocks kicked off March on a positive note Friday with
sentiment bolstered by news that trade negotiations between the
U.S. and China may conclude as soon as in two weeks. However, the
latest data on U.S. manufacturing disappointed, tempering
investors' optimism.
How are benchmarks faring?
The Dow Jones Industrial Average gained 75 points, or 0.3%, to
25,991, while the S&P 500 index rose 12 points, or 0.3%, to
2,796. The Nasdaq Composite Index advanced 43 points, or 0.6%, to
7,576.
The S&P 500 and the Nasdaq are poised to rise for the week
at their current pace while the Dow may snap its nine-week winning
streak.
What's driving the market?
Hope of an imminent conclusion to Sino-American trade
negotiations in the next couple of weeks was among the factors
sparking buying interest.
According to Bloomberg News
(https://www.bloomberg.com/news/articles/2019-02-28/u-s-said-to-ready-final-china-trade-deal-as-hawks-urge-caution?srnd=premium-asia),
U.S. officials were preparing for a summit between President Donald
Trump and Chinese leader Xi Jinping at which a 150-page agreement
could be signed. However, during a news conference while abroad
this week, Trump emphasized his willingness to walk away if a
favorable trade deal couldn't be struck.
Earlier this week, top trade negotiator Robert Lighthizer said
that tariffs on $200 billion in Chinese goods set to increase to
$25% from 10% at 12:01 a.m. March 2, wouldn't go into effect.
Meanwhile, in the U.K., the opposition Labour Party has
confirmed it would support a second referendum on membership of the
European Union, while Prime Minister Theresa May has agreed to
allow Parliament to delay Brexit, which many analysts say raises
the chances that the nation's withdrawal from the bloc will be put
off past the March deadline.
What data are in focus?
The Institute for Supply Management's manufacturing index fell
to 54.2% in February
(http://www.marketwatch.com/story/manufacturers-grow-at-slowest-pace-since-trumps-election-in-fall-2016-ism-finds-2019-03-01),
below economists' expectations of 55.5%, according to a MarketWatch
poll. It also marked the slowest pace of growth since the election
of President Trump in November 2016
Markit's manufacturing PMI also disappointed, coming in at 53.0
in February, after hitting 53.7 in January.
The Commerce Department reported that the PCE inflation index
rose 0.1% in December, compared with the 0.4% increase in November,
above economists estimates of a 0.4% decline, according to a
MarketWatch poll. The 12-month change in prices remained steady at
1.9%.
Meanwhile, the government reported that personal income rose 1%
in December, above economists' expectations of 0.4%, and above the
0.2% rise in November.
Consumer sentiment came in below economists' expectations
(http://www.marketwatch.com/story/university-of-michigan-consumer-sentiment-reading-misses-expectation-2019-03-01),
with the University of Michigan's index came in at 93.8, versus
expectations of 95.6, per a MarketWatch survey of economists.
What are strategists saying?
"Both of the US manufacturing PMIs dramatically undershot
expectations," Connor Campbell, financial analyst with SpreadEx
wrote in a note. "Granted, these numbers are a lot better than what
was posted by the UK, China and the Eurozone -- the latter 2
regions saw their respective manufacturing sectors stuck in
contraction territory -- earlier in the day, but they are
nevertheless cause for concern," he added.
It was these disappointing figures that helped put pressure on
stocks earlier, causing them to fall "well off the 170 point rise
suggested by the futures before the PMIs were released," he
wrote.
David Madden, a market analyst at CMC Markets UK, credited
Friday's gains to fading trade worries. The trade agreement is not
a certainty but investor know that the U.S. and China are headed in
the right direction, he said.
Which stocks are in focus?
Shares of Gap Inc. (GPS) jumped 18% after the giant clothing
retailer said it was splitting into two publicly trade companies
(http://www.marketwatch.com/story/gap-stock-skyrockets-over-20-as-company-will-spin-off-old-navy-2019-02-28)
and closing some 200 stores.
Foot Locker Inc. (FL) shares rallied 6% after the sporting goods
and apparel retailer blew past earnings estimates
(http://www.marketwatch.com/story/foot-locker-shares-soar-185-premarket-after-blowout-earnings-2019-03-01)
for its fiscal fourth quarter.
Shares of Immunogen Inc. (IMGN) sank 47% after the company said
a phase 3 trial of its ovarian cancer treatment, mirvetuximab
soravtansine, failed to meet its primary endpoint
(http://www.marketwatch.com/story/immunogens-stock-loses-nearly-half-its-value-after-trial-of-cancer-treatment-fails-to-meet-primary-endpoint-2019-03-01)
of progression free survival.
Shares of Tesla Inc. (TSLA) skidded 8.3% after the electric-car
manufacturer announced
(http://www.marketwatch.com/story/tesla-launches-35000-shorter-range-model-3-2019-02-28)
Thursday evening that it is likely to report a loss in the fourth
quarter, contrary to previous predictions. Tesla also announced
that it would offer its Model 3 for $35,000, while saying it would
lay off employees to cut costs.
Dentsply Sirona Inc. (XRAY) shares surged 17% after the maker of
dental products and technologies beat analyst estimates
(http://www.marketwatch.com/story/dentsply-sirona-earnings-top-estimates-2019-03-01)
for fourth-quarter earnings and sales.
Dow component Walgreens Boots Alliance Inc. (WBA) dropped 6.3%
after the drugstore chain said
(http://www.marketwatch.com/story/walgreens-stock-sinks-to-lead-dow-losers-as-reimbursement-headwinds-generic-deflation-pressures-continue-2019-03-01)
it continues to face reimbursement headwinds, as well as pressure
from falling prices for generic drugs.
How are other markets trading?
Stocks in Asia rose on trade optimism with Japan's Nikkei 225 ,
Hong Kong's Hang Seng Index , and China's Shanghai Composite Index
all finishing higher.
In Europe, stocks closed higher with the Stoxx Europe 600 rising
0.4%.
In commodities markets, the price of oil traded lower, while
gold prices fell and the U.S. dollar rose against its peers.
--Mark DeCambre contributed to this report
(END) Dow Jones Newswires
March 01, 2019 13:33 ET (18:33 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
Von Mär 2024 bis Apr 2024
FTSE 100
Index Chart
Von Apr 2023 bis Apr 2024