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US stocks closed higher on Tuesday as the energy and financial sectors supported the market, but major indices broke their hints of the day on warm housing and consumer confidence data as well as persistent uncertainties about global growth and Brexit.
How did the benchmarks behave?
The Dow Jones Industrial Average
DJIA, + 0.55%
increased by 140.90 points, or 0.6%, to 25,657.73 after increasing more than 200 points during the session. The S & P 500 index
SPX, + 0.72%
rose 20.10 points, or 0.7%, to 2,818.46, with energy and financial stocks leading the way. The Nasdaq composite
COMP + 0.71%
climbed 53.98 points, or 0.7%, to 7,691.52.
Lily: Why a reverse yield curve does not mean that investors should immediately sell shares
What motivated the market?
Trade talks between the United States and China have resumed, sparking renewed optimism about closing the high-stakes conflict. Cabinet-level trade talks between Beijing and Washington are expected to begin, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are expected to visit China later this week to help broker lengthy discussions between the two largest corporations. economies of the world.
A resolution of tariff disagreements could boost markets and help investors wring their hands in the face of growing signs of a slowing global economy, possibly exacerbated by the trade dispute.
Nevertheless, the latest published data suggest that US economic growth could moderate.
Homebuilders started building new homes at a seasonally adjusted annual rate of 1.16 million in February, down 9% from the previous month and much lower than the previous month. last year.
House prices have been growing at the slowest pace for more than six years, with the S & P CoreLogic Case-Shiller index of 20 cities growing at a seasonally adjusted rate of 0.2% in January compared with the previous month. to December.
Consumer confidence fell sharply in March, according to the Conference Board Consumer Confidence Index, which went from 131.4 to 124.1 in February.
Financial markets have been disrupted by the reversal of the yield curve – an unusual situation in which short-term public debt rates exceed long-term counterparts. The inversion between the three months of cash
TMUBMUSD03M, -0.22%
and the 10-year note has been reversed for the first time since 2007 on Friday.
The 10-year Treasury yield
TMUBMUSD10Y, -0.19%
however, rose to 2.42% on Tuesday.
Investors also monitored the Brexit, after UK lawmakers decided Monday night to stop controlling the process of leaving the European Union out of prime minister Theresa May for the purpose of spark a series of votes this week to reduce legislative blockages. A disorderly exit from Britain by the EU could upset global standards.
Lily: Brexit vote leaves European markets in turmoil
What did the strategists say?
"Technically, we had a short-term downtrend. Last week, we tested the 26,000 level in industrial products twice unsuccessfully and sold, "said Sahak Manuelian, general manager of equity trading at Wedbush Securities. "Investor sentiment [is] still worried by the large gains recorded since the beginning of the year, worries about global growth persist, the lack of clarity about US – China trade and, if at all it seems to be growing further, and Brexit [is] always messy. "
"We are getting a favorable reaction on the equity markets because [bond] returns have not declined significantly, "MarketWatch Michael Reynolds, head of investment strategy at Glenmede, told MarketWatch.
"We consider inverting the yield curve at three months and ten years as a technical reversal. And just because it's one of the best indicators of an impending recession, it's not a perfect indicator, "he added.
Equity investors have decided to "do not press the panic button for the moment", as low yields of long – term public debt may be more likely to result from low or negative bond yields. State of other developed economies, rather than bond investors Mr Reynolds said confidence in the growth of the US economy was assured.
"There is a lot of internal energy for the stock market on a monthly or medium-term basis, but short-term work suggests the continuation of a stall for equity markets with little downward movement at as long as there is no "black swan". "news event", wrote Jeffrey Saut, chief investment strategist at Raymond James.
What actions were under discussion?
Apple Inc..
AAPL, -1.03%
US stocks fell 1% after the US International Trade Commission ruled that the iPhone maker had breached an aspect of the Qualcomm Inc.
QCOM, + 2.40%
patent, which will result in a ban on the importation of certain devices. Qualcomm shares increased 2.4%.
Actions of McCormick & Co. Inc.
MKC + 0.99%
rose 1% after spices and seasonings reported fourth-quarter results above Wall Street's expectations, though its revenue was below expectations.
Bath & Beyond Bed Inc.
BBBY, + 21.99%
Stocks climbed 22% after the Wall Street Journal announced that three activist investors were preparing to launch a proxy fight to replace the entire board of the retailer.
Cronos Group Inc.
CRON, -1.41%
shares fell 1.4% after the quarterly profits of the cannabis company failed to impress investors. Cronos recorded a net loss of C $ 11.8 million ($ 8.8 million), or 6 cents per share, for the fourth quarter, for a C $ 5.6 million turnover. .
Actions of Nvidia Corp.
NVDA, + 1.78%
rose 1.8% after a Piper Jaffray analyst advised investors to focus on the chip maker's long-term opportunities.
What did the other markets do?
European equity markets rose thanks to the Stoxx 600 Europe Index
SXXP, + 0.77%
up 0.8%. Chinese stock markets closed down, while Japan's Nikkei
NIK -0.68%
increased with Hong Kong's Hang Seng Index
HSI, -0.01%
In commodity markets, crude oil prices
CLK9, + 0.10%
rebounded, while gold prices
GCJ9, + 0.20%
set lower, and the US dollar
DXY, + 0.05%
checked higher.
-Marque DeCambre contributed to this report
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