By Chris Matthews and Mark DeCambre, MarketWatch
Rite Aid shares rally following planned CEO departure
U.S. stocks rose Wednesday morning, putting them on track for a
third straight day of gains as investors weighed conflicting data
on the U.S. economy with concerns tied to the U.K.'s exit from the
European Union.
Shares of Boeing were on investors' minds in the aftermath of a
series of groundings of its 737 Max 8 fleet by regulators outside
the U.S., with the stock edging higher for the first time eight
sessions.
How did major indexes fare?
The Dow Jones Industrial Average rose 136 points, or 0.5%, to
25,687, while the S&P 500 index added 20 points, or about 0.7%,
to 2,811. The Nasdaq Composite Index advanced 57 points, or 0.8%,
at 7,648.
Read:Why a bout of small-cap carnage could be a red flag for
stock-market bulls
(http://www.marketwatch.com/story/why-a-bout-of-small-cap-carnage-could-be-a-red-flag-for-stock-market-bulls-2019-03-11)
What drove the market?
U.S. investors continue to parse conflicting data on the U.S.
economy, with a report on durable goods orders coming in
surprisingly stron
(http://www.marketwatch.com/story/durable-goods-orders-rise-in-january-for-3rd-straight-month-and-investment-rebounds-2019-03-13)g
Wednesday, following previous reports showing a sharp slowdown in
business investment.
A wholesale inflation report published Tuesday, however, came in
weaker than expected
(http://www.marketwatch.com/story/wholesale-prices-creep-higher-in-february-but-inflation-poses-little-threat-ppi-shows-2019-03-13),
following a disappointing jobs report last week.
British lawmakers on Tuesday rejected Prime Minister Theresa
May's revised Brexit deal in a 242-391 vote and now are looking at
a second vote to on whether an exit without a pact with Europe's
trade bloc can be taken off the table before a March 29
deadline.
A so-called hard-Brexit scenario has stoked volatility in
Britain's currency and has the potential to unsettle domestic
markets, experts say.
Meanwhile, concerns around growth in the U.S. continued after
new inflation data published on Tuesday came in weaker than
expected, adding to a disappointing jobs report on Friday.
Despite those worries, and no fresh news on Sino-America trade
developments, stocks have mostly climbed on the back of strong
gains in the technology sector.
What data are traders watching?
Durable-goods orders rose in January by 0.4%
(http://www.marketwatch.com/story/durable-goods-orders-rise-in-january-for-3rd-straight-month-and-investment-rebounds-2019-03-13),
the government reported Wednesday, above the 0.1% decrease expected
by economists polled by MarketWatch.
The Commerce Department report also showed core capital orders,
a key measure of business investment, rising 0.8% in January after
falling sharply the two months previous.
The cost of wholesale goods rose 0.1% in February
(http://www.marketwatch.com/story/wholesale-prices-creep-higher-in-february-but-inflation-poses-little-threat-ppi-shows-2019-03-13),
below the 0.2% increase expected by economists, per a MarketWatch
poll. The 12-month increase in producer prices fell from 2.5% to
2.3%, well below last summer's peak of 3% growth.
U.S. construction spending rose 1.3% in January, the Commerce
Department said Wednesday, the largest increase since April, after
a 0.8% decrease in December.
What are strategists saying?
"The rebound in underlying capital goods orders in January is
still consistent with a slowdown in business equipment investment
growth in the first quarter, although it suggests that slowdown
will not be as sharp as signaled by some of the incoming survey
evidence," wrote Michael Pearce senior U.S. economist with Capital
Economics in a Wednesday note.
"With the February producer price figures showing few signs of a
pickup in inflation in the pipeline, there is still a strong case
for the Fed to remain patient," he added.
David Madden market analyst at CMC Markets UK, said the
investment climate is "gloomy this morning as Brexit still hangs
over the markets. Theresa May's withdrawal agreement was voted down
yesterday, which wasn't a huge surprise."
Which stocks are in focus?
Boeing Co. shares (BA) rose 0.7% early Wednesday, as the stock
looks to snap a eight-day losing streak that shaved nearly 15% from
its value. A pair of crashes involving its 737 Max 8 jets, have
weighed on the aviation and defense maker's stock and the Dow,
where it is a key component. Shares were up 0.2% on Wednesday but
remain off nearly 11% so far this week.
Shares of Rite Aid Corp.(RAD) were in focus after the drugstore
chain's CEO John Standley said he would step down. Shares were up
3.7%.
Shares of Express Inc. (EXPR) fell 6.6% Wednesday morning, after
the fashion apparel retailer
(http://www.marketwatch.com/story/expresss-stock-plunges-after-sales-miss-downbeat-outlook-offsets-adjusted-profit-beat-2019-03-13)
beat fourth-quarter profit expectations but missed on net sales and
provided first-quarter outlook that was worse than forecasts.
Take-Two Interactive Software (TTWO)stock rose 3.6% Wednesday,
on rumors that Sony Corp. (6758.TO) "is in advanced board level
discussions to acquire Take Two Interactive in a mostly cash deal,"
that would value the company at $130 share, according to Joel
Kulina, head of technology and media trading at Wedbush
Securities.
How are other markets trading?
Asian markets closed lower on Wednesday
(http://www.marketwatch.com/story/asian-markets-lower-amid-weight-of-global-uncertainties-2019-03-12),
with Japan's Nikkei 225 losing 1%, Hong Kong's Hang Seng Index
shedding 0.4% and China's Shanghai Composite Index retreating
1.1%.
European stocks were edging higher Wednesday, with the Stoxx
Europe 600 rising 0.4%.
The price of oil continued to rise Wednesday, while gold also
rose. The U.S. dollar , meanwhile, edged lower.
(END) Dow Jones Newswires
March 13, 2019 11:10 ET (15:10 GMT)
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