Stocks seized powerful early gains Thursday, as progress in the U.S.-China trade war unleashed an optimistic response to early earnings news.
XWalmart (WMT) and Cisco Systems (CSCO) scored big earnings wins. Smart home play Control4 (CTRL) neared a buy point after its earnings beat. Top stocks NetApp (NTAP) and JD.com (JD) suffered relatively minor losses following their quarterly reports.
The Dow Jones industrial average opened 1.1% higher, as Walmart and Cisco Systems pounded out broad early advances. The Nasdaq Composite and S&P 500 each sprinted 0.7% higher at the starting bell. (For updates on this story and other market coverage, visit the Stock Market Today.)
China and the U.S. appeared set for a grudging step forward in their trade war standoff. The U.S. Treasury Department invited a delegation from China's Ministry of Commerce to Washington. A specific data was not named, although National Economic Council Director Larry Kudlow said talks were scheduled for later this month, according to CNBC. The two countries have not held direct talks since May.
Walmart, Cisco Lead Dow; Control4 Eyes Buy Point
Walmart opened with a 9.9% jump to lead the Dow and S&P 500. The juggernaut retailer reported a 14% jump in second-quarter earnings, and a 4% revenue gain, both above analyst estimates. Walmart same-store sales surged 4.5% — more than double analyst expectations, and the largest jump in a decade. Walmart shares ended Wednesday 11% off a May low. The stock was set to test resistance at its 10-week moving average, within a six-month consolidation.
Cisco Systems topped the Nasdaq 100, powering up 3.6% after its fiscal fourth-quarter results easily cleared analyst forecasts. Cisco Systems also hoisted its first-quarter revenue outlook higher more than expected. The heavyweight network gear maker finished Wednesday a bit less than 5% below a 46.47 buy point in a cup base. The base also offers an alternate buy point at 44.91 for more aggressive investors.
Also on the Dow, tariff-sensitive Boeing (BA) opened 3.2% higher. The aerospace giant is fighting to avoid a third consecutive weekly decline, after finding some support on Wednesday at its 40-week moving average.
Control4 rose 1%, as a 39% jump in earnings per share and a 13% revenue gain bested analyst forecasts. The developer of software to integrate smart home and Internet of Things environments is below a 33.57 buy point in a long, deep cup-with-handle base.
On the downside, NetApp dipped less than 1% in early trade after reporting mixed second-quarter results late Wednesday. China-based JD.com fell 1.8%, as both its revenue and earnings fell short of projections for its second quarter.
Dow, Nasdaq Poised For 50-Day Bounce
The Dow and the Nasdaq both dropped on Wednesday to test their 50-day moving averages. Both indexes pared their intraday losses, finding some support at that level. The Nasdaq has bounced off its rising 50-day line twice in the past eight weeks. The Dow's 50-day currently sits squarely at the 25,000 level — a number the Dow has been fighting to put in its rear-view mirror since the start of the year.
The S&P 500 outperformed its peers on Wednesday. It pared losses more aggressively than either the Dow or the Nasdaq. In addition, its pullback stopped short of its 50-day line and just above the 2800 level. Chipotle Mexican Grill (CMG), Kimberly Clark (KMB), Boston Scientific (BSX) and Progressive (PGR) did the heavy lifting in hauling the S&P 500 off Wednesday's midday lows.
An Eye On Oil Prices
Oil prices edged higher, after coming down hard and factoring prominently in Wednesday's market declines. West Texas Intermediate rose 0.2% to $65.11 early Thursday. WTI had settled 3% lower on Wednesday at $65.01. That left the benchmark down nearly 4% for the week, 14% off its July 3 high and set to retest its lows marked off in mid-June. Oil-related stocks posted six of Wednesday's 10 worst losses on the S&P 500 list. Chevron (CVX) took the hardest hit among the Dow industrials.
Housing Starts Slip; Philly Fed Index Dives
Housing starts undercut expectations in July, the Commerce Department reported. July's annualized pace of 1.168 million starts was down from 1.173 million new projects launched in June, and far below consensus forecasts for a jump to 1.271 million during the busy summer season.
Home building permits, which gauge future activity, rose to 1.311 million, on an annualized basis. That was up from June's pace of 1.273 million permits issued, and above economist forecasts for 1.307 million permits.
First-time unemployment claims eased even lower, to 212,000, in the week ended Aug. 11. according to the Labor Department. Economist consensus had projected an increase to 215,000.
The Philadelphia Federal Reserve's Manufacturing Outlook Survey slumped to a reading of 11.9 in August. Down from July's 25.7, and well below expectations for a dip to 22.5, the tally was the gauge's lowest in 21 months. New orders fell off, hiring slowed and the average workweek declined. However, business remained optimistic in their six-month outlook, the report said, and most forward looking indicators increased.
RELATED:
Nvidia, Walmart, JD.com, Nordstrom Report Earnings: Investing Action Plan
Dow Jones Futures Jump As U.S.-China Trade Talks To Restart; Cisco Soars To Buy Zone
The Big Picture: Market's Health Weighs On This Critical Factor
4 Things To Consider Before Buying Nvidia Ahead Of Earnings
How To Buy Growth Stocks: Miss The Nvidia Stock Breakout In 2016? How To Buy The Next One
