US open: Wall Street jumps on appearance of improving US-China relations, WTI crashing
By Iain Gilbert
Date: Tuesday 13 Nov 2018
(Sharecast News) - US stocks appear to be moving higher quickly on Tuesday following a hesitant start amid hopes that relations between China and the US are improving.
At 1627 GMT, the Dow Jones Industrial Average was up 0.33% or 85.24 points to 25,470.11, while the S&P 500 had snapped higher by 0.84% to 2,732.98 and the Nasdaq Composite was 1.35% ahead to 7,297.87.
Wall Street had sustained a bout of heavy profit-taking the day before, with the Dow Industrials retreating by roughly 600 points, as Apple led tech shares lower after a number of chip suppliers warned on their future earnings outlook, citing weaker mobile phone demand.
"This really shouldn't have come as a shock given the break down in Apple's numbers earlier this month, the surprise is that investors took so long to put two and two together," said CMC Markets analyst Michael Hewson.
"The decision to stop reporting the unit sales numbers for iPhones, iPads and other individual products should have clued investors in to begin with, along with the slight miss on handset sales. The focus on an average selling price of $793 a unit helpfully disguises the fact that while margins are likely to be higher on individual products they don't need to sell anywhere near as many products to meet revenue targets, which means fewer chips."
Elsewhere, there were signs of a small thaw in Sino-US relations following reports that China's top trade negotiator was preparing to visit the US ahead of the G20 summit later this month, supplemented by positive remarks from National Economic Council head, Larry Kudlow, on CNBC, just after the opening bell.
Front-month West Texas Intermediate crude oil futures were down by 4.371% to $57.42 a barrel on the ICE.
Pacing gains, the best performing sectors were: Durable Household Products (3.46%), Semiconductors (3.43%) and Tires (3.-08%).
On the macro front, small business sentiment in the US deteriorated in October, according to the National Federation of Independent Business.
The small business optimism index ticked down to 107.4 from 107.9 in September, slightly below consensus expectations of 108.0.
Pantheon Macroeconomics noted that the index was dragged down a by three-point fall in the "good time to expand" index, a two-point decline in earnings expectations and one-point dips in hiring and inventory plans.
"Further declines in the headline are likely, because the economic expectations component, which is very sensitive to the stock market, was unchanged in October; we expect it to fall in November," said Pantheon analyst Ian Shepherdson.
Elsewhere, the data calendar was fairly quiet today, with the focus on US Fed speakers Kashkari, Brainard and Harker.
Trump, who spent much of the morning lambasting French President Emmanuel Macron on Twitter, is scheduled to meet with his trade team today to discuss auto tariffs.
In corporate news, Home Depot was down 2.93% at the open despite its third-quarter earnings beating expectations, leading it to lift its sales and earnings guidance.
Advance Auto Parts shares surged 9.47% after the release of its third-quarter earnings.
Caterpillar shares rose 1.75% despite revealing a continued deceleration in its sales growth.
Email this article to a friend
or share it with one of these popular networks:
You are here: news
10 Lower Thames St,
London EC3R 6EN