Markets largely held fire early Thursday, opening narrowly lower as the U.S. launched new tariffs against China, China retaliated, and global bankers gathered for a Federal Reserve conference in Jackson Hole, Wyo.
XIn early stock action, Victoria's Secret owner L Brands (LB) and meat producer Hormel (HRL) dived on earnings news. Alibaba Group Holding (BABA) and Children's Place (PLCE) gained on their quarterly results. And chipmaker Advanced Micro Devices (AMD) plowed further into a profit-taking zone following an early-June breakout.
The Nasdaq Composite reversed early losses and rose 0.2%. Synopsys (SNPS) led the Nasdaq 100, followed by two China-based stocks: JD.Com (JD) and Ctrip.com International (CTRP). The Dow Jones industrial average slipped 0.2%. 3M (MMM) and Caterpillar (CAT) each swung 1% lower, the deepest early decline among Dow stocks.
The S&P 500 clawed out of early losses and into a fractional gain. Hormel and L Brands were the worst performers among S&P 500 stocks. Synopsys and AMD topped the index. (For updates on this story and other market coverage, visit the Stock Market Today.)
Global Markets Hold Ground After Trade War Tariffs
Just after midnight the U.S. added 25% tariffs to 279 China-made imports including plastics, semiconductors, chemicals and a long list of consumer goods. China immediately responded by slapping duties on steel products, refined fuels, autos and medical equipment. Both sets of tariffs target imports valued around $16 billion per year.
That brings the total goods targeted by tariffs on each side to $50 billion. The Trump administration has threatened to penalize another $200 billion in China imports, possibly by the end of September. U.S. and Chinese undersecretaries in trade and commerce are wrapping up two days of low-level talks in Washington today. Expectations for the talks were low.
China markets showed little reaction to the trade war uptick. The Shanghai Composite Rose 0.4%. Hong Kong's Hang Seng Index dipped 0.5%. In Japan, Tokyo's Nikkei 225 edged ahead 0.2%.
In Europe, markets remained largely flat in afternoon trade. The CAC-40 in Paris gave up its gains to trade flat. Frankfurt's DAX eased 0.2% and the FTSE 100 in London wrestled a fractional loss.
Jackson Hole Confab Begins, Dollar Climbs, Oil Prices Slip
Thursday also sees the Kansas City Federal Reserve kick off its global economic symposium in Jackson Hole, Wyo. The conference rarely produces any significant news, and this year's central theme "Changing Market Structure and Implications for Monetary Policy," is not likely to move markets. But discussions and interviews will be carefully watched, with the Fed currently leaning toward two more rate hikes before the end of the year. Jerome Powell will deliver his first speech as Fed chairman to the gathering on Friday morning.
Minutes released Wednesday from the Federal Reserve's early August meeting indicated the year's third rate hike was likely in September. That sent the dollar higher both Wednesday and Thursday, bolstering markets in Japan and China. The minutes showed the Fed set to increase rates if the economy holds to its current track of improvement.
Oil prices slipped Thursday, with West Texas Intermediate down 0.8% to $67.33 a barrel. Oil is nevertheless set to break a seven-week decline, rebounding over the past five sessions to trade up 5% from an Aug. 16 low. Exxon Mobil (XOM) posted the top gain among Dow stocks on Wednesday.
Alibaba, AMD Advance; Synopsys Breaks Out
China-based Alibaba Group Holdings rose 4.7%, after reporting slightly above-forecast fiscal first-quarter results. Revenue rocketed 65% higher, while earnings rose only 3% due to heavy spending to build the business. Alibaba shares have fallen 16% from a mid-June high, and are testing resistance at their converged 10- and 40-week moving averages.
Other China-based stocks were generally positive early Thursday, with Huya (HUYA) up 1.3% and iQiyi (IQ) ahead 1.9% in early trade. China's Baozun (BZUN) topped the IBD 50 list, surging 3.6% ahead of the open and trading below a 66.03 buy point in a double-bottom base.
Apparel retailer Children's Place shed its premarket gains and fell 0.6% after landing a solid second-quarter performance and raising earnings and revenue guidance for the full-year. The stock has been climbing the right side of a seven-month cup, with a buy point at 161.75.
Advanced Micro Devices powered up 4.4%, seizing another new high, as well as a fifth straight advance. The stock cleared a 15-month saucer base in early June. It ended Wednesday in a profit-taking zone, 33% above that base's 15.75 buy point.
L Brands dived 8.1% on weak guidance, Hormel dropped 2.4% after reporting mixed fiscal third-quarter results.
Chip design software maker Synopsys popped 6% after delivering a strong fiscal third-quarter report late Wednesday. The gap up move sent shares above a 94.90 buy point in a nine-month saucer base.
Companies scheduled to report quarterly results after Thursday's close include Gap (GPS), Intuit (INTU), HP Inc. (HPQ) and Globant (GLOB).
RELATED:
Dow Jones Futures: New Trump Tariffs On China Kick In; Facebook Data Scandal Widens
The Big Picture: 5 Key Elements To Focus On Now
Fed Signals Readiness To Hike Rates Again If Economy Stays On Track
These 3 Stocks Are Near Buy Points Ahead Of Earnings: Investing Action Plan
