Stocks extended their gains in late-afternoon trading on Wall Street as investors remained optimistic that the U.S. and China will make more progress in resolving their costly trade dispute and more in Wednesday’s Stock Market Update.
Technology companies, industrial stocks and retailers accounted for much of the market’s broad gains, a sign that traders expect the economy to remain healthy.
Key officials from the world’s two largest economies will meet Thursday and Friday to try and stave off an escalation of a trade conflict that has hurt companies and consumers by raising prices on a number of products. President Donald Trump has said he might let a March 2 deadline slide if the U.S. and China get close to a deal.
After March 2, additional tariffs are scheduled to kick in, making the situation worse. Economists and analysts are optimistic that both sides will eventually hammer out an agreement that satisfies U.S. complaints that China steals or pressures U.S. companies to hand over technology.
The market was gaining momentum in late-afternoon trading after losing some ground earlier in the day. That stumble came as U.S. Sen. Marco Rubio announced over Twitter plans to introduce a bill aimed at deterring companies from buying back their own stock. The Republican from Florida said the argument that stock buybacks free up money for companies to reinvest in growth “isn’t backed up by the facts.”
Meanwhile, U.S. companies are nearing the end of a relatively strong earnings season. Hotel operator Hilton gained after reporting profit and revenue that easily beat analysts’ forecasts. Groupon fell as lower sales resulted in weak fourth-quarter profit.
STOCK MARKET UPDATE
KEEPING SCORE: The Dow Jones Industrial Average rose 117 points, or 0.5 percent, to 25,543 at closing time. The S&P 500 index, which is on a three-day winning streak, gained 8 points, or 0.3 percent, to 2,753. The Nasdaq composite added 0.4 percent.
THE QUOTE: “The president’s seemingly positive tone regarding trade has helped underpin the market, particularly the industrial names,” said Quincy Krosby, chief market strategist at Prudential Financial. “That’s a positive catalyst for the market.”
LEVEL UP: Video game maker Activision Blizzard jumped 8.1 percent as it moved to layoff nearly 800 workers, in part to deal with a steep downturn in revenue following the best year in its history. The maker of “Call of Duty” and “Candy Crush,” expects revenue to decline about 20 percent this year.
The company is facing tougher competition, specifically from Epic Games’ “Fortnite”, which is siphoning away sales.
ROOM SERVICE: Higher room rates pushed hotel operator Hilton Worldwide to a strong fourth-quarter profit, beating analysts’ forecasts. The company also gave Wall Street a strong profit forecast for the current quarter.
Hilton’s stock rose 6.2 percent and competitor Marriott International added 3.5 percent.
BUM DEAL: Groupon fell 10.8 percent after the online daily deal service came up short of analysts’ profit forecasts for the quarter. Customer traffic in its key North America market fell, dragging down revenue.
BAD TRIP: TripAdvisor slid 5.6 percent after the travel website operator reported weaker-than-expected fourth-quarter profit and lower revenue from its key hotel bookings segment.
OIL: U.S. benchmark crude rose 1.5 percent to settle at $53.90 a barrel in New York. Brent crude, the standard for international oil prices, gained 1.9 percent to close at $63.61 a barrel in London. Government forecasters are sticking to their forecast that the United States, already the world’s biggest oil producer, will become a net exporter of crude and petroleum products in 2020.
BOND YIELDS: Bond prices fell. The yield on the 10-year Treasury rose to 2.71 percent from 2.68 percent late Tuesday.
CURRENCIES: The dollar rose to 110.99 yen from 110.52 yen on Tuesday. The euro weakened to $1.1271 from $1.1331.
METALS: Gold added 0.1 percent to $1,315.10 an ounce. Silver slipped 0.2 percent to $15.65 an ounce. Copper was little changed at $2.77 a pound.
OVERSEAS STOCK MARKET UPDATE: Stocks in Europe rose broadly, despite a report of slumping industrial output across the 19 countries that use the euro. Industrial output fell 4.2 percent in December, marking the worst rate of decline since November of 2009.
Asian markets were also higher.
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