Dow Finished Up 300 Points, Rebound From Worst Day of the Year
Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average rebounded Tuesday and finished up nearly 300 points, one day after the major indexes posted their worst day of the year. China pegged its yuan inside the 7 mark after the Treasury labeled the country a currency manipulator.
- Take-Two Interactive Software (TTWO) rose after the videogame maker posted stronger-than-expected earnings and raised its full-year profit outlook. Take-Two Interactive is Real Money’s Stock of the Day.
- Ford (F) shares rose after analysts at Morgan Stanley boosted their price target on the car maker and said a more-focused model lineup would keep profit stable over the next two years.
Wall Street Overview
Stocks rebounded Tuesday, one day after posting their worst session of the year, and finished up after China pegged its yuan inside the 7 mark following the Treasury Department’s decision to label the country a currency manipulator.
The Dow Jones Industrial Average, which ended down 767 points in the previous session, snapped a five-day losing streak and finished up 311 points, or 1.21%, to 26,029. The S&P 500 rose 1.30%, and the Nasdaq climbed 1.39%.
Nike (NKE) , Cisco (CSCO) ,and United Technologies (UTX) were leading the Dow advance at the market close.
The move from the People’s Bank of China was seen as an attempt to ease tensions between the world’s two biggest economies as their ongoing trade dispute threatens global-growth prospects.
The PBoC set the midpoint of its daily yuan pricing at 6.9683, one of the lowest levels since 2008 but under the 7 threshold that triggered global-market turmoil and the biggest selloff of the year for U.S. stocks on Monday.
The Treasury’s move to label China a manipulator, alongside President Donald Trump’s renewed plea to the U.S. Federal Reserve to respond to China’s yuan devaluation, has boosted bets for near-term rate cuts.
The CME Group’s FedWatch tool, which assigns rate-change probability, is pricing in a 83.5% chance of a 25-basis-point September cut, up from 54.8% last week, and a 16.5% chance of a 50-basis-point move, up from 2% last week.
White House trade adviser Peter Navarro on Monday called on the U.S. Federal Reserve to cut interest rates by another three-quarters of a point to a full point by year-end to bring U.S. rates into line to with rates elsewhere.
“The Federal Reserve before the end of the year has to lower interest rates by at least another 75 basis points or 100 basis points to bring interest rates here in America in line with the rest of the world,” Navarro told Fox News. “We have just too big a spread between our rates and that costs us jobs.”
White House economic adviser Larry Kudlow, said on CNBC Tuesday morning that Trump is “very open to negotiations” with China and suggested the president might be flexible regarding tariffs. He added that the U.S. is still expecting to resume trade talks with the Chinese in September.
Trump, Kudlow said, would “like to continue negotiations.”
“He’d like to make a deal,” Kudlow said, “but it has to be the right deal for the United States.”
Kudlow said China is being hurt by tariffs “much more significantly than we are.”
“China is not the economic powerhouse it was 20 years ago,” Kudlow said. “Everybody knows that.”
Trump said on Twitter that the U.S. is in a “very strong” economic position and that interest rates and investment opportunities are attracting “massive amounts of money from China.”
Massive amounts of money from China and other parts of the world is pouring into the United States for reasons of safety, investment, and interest rates! We are in a very strong position. Companies are also coming to the U.S. in big numbers. A beautiful thing to watch!
— Donald J. Trump (@realDonaldTrump) August 6, 2019
In company news, Take-Two Interactive Software (TTWO) shares advanced 8% to $124.56 after the videogame maker posted stronger-than-expected first-quarter earnings and boosted its full-year profit outlook. Take-Two Interactive Software is Real Money’s Stock of the Day.
Ford (F) shares rose 2.8% to $9.49 after analysts at Morgan Stanley boosted their price target on the car maker and said a more-focused model lineup would keep profit stable over the next two years.
Three major providers of prescription medicine proposed a $10 billion settlement for claims they helped fuel the U.S. opioid overuse, people familiar with the negotiations told Bloomberg News.
McKesson (MCK) , Cardinal Health (CAH) and AmerisourceBergen (ABC) made the proposal during talks with a group of state attorneys general, the news service said. The shares of the three companies ended lower.
Shares of Allergan (AGN) were off slightly to $159.55 after the Botox maker posted stronger-than-expected second-quarter earnings and boosted its full-year sales guidance. The company in late June agreed to a $63 billion takeover from biopharmaceutical group AbbVie (ABBV) .
Shares of Novartis (NVS) were down 2.7% to $88.23 after the FDA said data from the testing of its gene-therapy product Zolgensma was manipulated, but the agency also said the drug should stay on the market.
Alphabet (GOOGL) shares climbed 1.4% to $1,171.08 even though Trump unleashed a torrent of criticism toward the Google parent, accusing it of “very illegal” activity during the 2016 presidential election.
Mastercard Inc. (MA) agreed to pay 2.85 billion euros, or $3.2 billion, to acquire the majority of the corporate-services business of Nets, a European payments-technology company. The shares rose 3% to $264.64.
Snap Inc. (SNAP) , the parent of Snapchat, said it would privately place $1 billion of seven-year convertible senior notes with institutional investors. Snap shares were off nearly 1% to $16.31.
In economic news, the Labor Department’s Job Openings and Labor Turnover Survey, or JOLTS, found that U.S. job openings saw little change in June, with 7.35 million positions waiting to be filled, compared with an upwardly revised 7.38 million in May.
In the energy sector, Brent crude contracts for October delivery, the global benchmark, were down 75 cents to $59.06 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were 95 cents lower at $53.74 per barrel.