MARKET SNAPSHOT: Stocks Extend Gains After Report Trade Talks With China To Begin Monday

By Chris Matthews and William Watts, MarketWatch

Expectations for central bank easing help underpin equities, analysts say

Stocks extended gains Tuesday afternoon after a report said talks between U.S. and Chinese trade negotiators would begin next week.

Talks between China and the U.S. would start Monday as U.S. negotiators headed to China, Bloomberg reported (https://www.bloomberg.com/news/articles/2019-07-22/asian-stocks-set-for-modest-gains-oil-advances-markets-wrap?srnd=premium). The U.S. delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday.

Earlier better-than-expected earnings from Dow Jones Industrial Average components, Coca-Cola and United Technologies helped stocks rise for a second day.

How are the major benchmarks faring?

The Dow Jones Industrial Average was up 154 points at 27,325, while the S&P 500 index advanced 17 points to 3,001. The Nasdaq Composite Index was up 29 points to 8,234.

Equity benchmarks edged higher Monday. The Dow eked out a 17.7 point gain, a rise of less than 0.1%, to end at 27,171.90, while the S&P 500 rose 8.42 points, or 0.3%, to close at 2,985.03. The Nasdaq Composite rallied 57.65 points, or 0.7%, to 8,204.14.

But including Tuesday, the DJIA has not had a 1% move in either direction for 24 consecutive trading days, the longest such streak since August-October 2018 when it went 30 days without a 1% move. Similarly, the S&P 500 has not had a 1% move in either direction for 31 trading days, the longest such streak since June-October 2018 when it went 74 days without a 1% move.

What's driving the market?

Stocks traded mostly higher Tuesday afternoon, with Wall Street building on the previous session's modest gains, as investors digested a batch of good earnings reports, signs of progress on trade talks with China, and a proposed deal to lift the U.S. debt ceiling and avoid a government shutdown.

More than 18% of S&P 500 companies have posted quarterly numbers this earnings season. Of those companies more than 78% have reported better-than-expected profits, according to FactSet data. Those companies have also seen their earnings grow by an aggregate of 3.6%.

Meanwhile, global stocks appeared to receive support from expectations that the European Central Bank (ECB) and the Federal Reserve could soon cut interest rates. The ECB is seen cutting rates by 10 basis points on Thursday, with the U.S. central bank expected to lower rates by 25 basis points at the end of the month.

Visa , Chipotle (CMG), and Snap (SNAP) are due to report earnings after the market close Tuesday.

Earnings reporting season rolls on with companies including Amazon.com , Alphabet (GOOGL), Caterpillar (CAT), McDonald's (MCD) and (BA) still to report this week.

Late Monday, President Donald Trump and congressional leaders announced a budget deal (http://www.marketwatch.com/story/trump-says-compromise-deal-on-budget-debt-ceiling-reached-2019-07-22) that would avoid the possibility of a government shutdown or federal default.

But on the economic data front, existing home sales (http://www.marketwatch.com/story/existing-home-sales-dip-17-housing-market-struggles-despite-cheaper-mortgages-2019-07-23) fell 1.7% despite lower mortgages rates.

Read:Brace yourselves for Britain's new prime minister -- here's how markets may react (http://www.marketwatch.com/story/brace-yourselves-for-britains-new-prime-minister---heres-how-markets-will-react-2019-07-22)

Which stocks are in focus?

Dow-members Coca-Cola Co.(KO) saw its shares climb to a record after reporting better-than-expected earnings and raising its revenue forecast.

United Technologies Corp.(UTX), also a Dow component, beat earnings forecasts also and raised its full year outlook for earnings and revenue.

Apple Inc. (AAPL) shares rose, following a report in the Wall Street Journal that it is in "advanced talks' to buy Intel Corp.'s smartphone-modem chip business, valued at $1 billion. Apple stock rose 2.3% Monday, the best performing stock in the Dow (http://www.marketwatch.com/story/stock-futures-point-to-higher-start-ahead-of-earnings-deluge-2019-07-22). Intel shares advanced 0.9%.

Shares of Biogen Inc.(BIIB) were also on the rise after the company topped earnings forecasts and raised its outlook (http://www.marketwatch.com/story/biogens-stock-jumps-after-big-earnings-beat-raised-outlook-2019-07-23).

Lockhead Martin Corp. (LMT) stock fell, even after the aerospace and defense manufacturer surpassed analyst expectations for second-quarter profits and sales (http://www.marketwatch.com/story/lockheed-martin-shares-climb-premarket-after-earnings-beat-2019-07-23).

Shares of Snap Inc. (SNAP) were up, after Stifel analyst John Egbert upgraded the stock (http://www.marketwatch.com/story/snap-stock-gains-after-stifel-upgrades-ahead-of-earnings-2019-07-23) from buy to hold, ahead of the social media company's second-quarter earnings results, due after the close of trade Tuesday.

How are other markets trading?

The 10-year U.S. Treasury note was little changed around 2.05%.

Earlier West Texas Intermediate crude for September delivery fell 19 cents, or 0.3%, on the New York Mercantile Exchange to $56.03 a barrel. September Brent , the global benchmark, was off 28 cents, or 0.4%, to $62.98 a barrel on ICE Futures Europe. News of Iran's seizing of tankers in the Gulf was outweighed by a weak outlook for demand.

In Asia overnight Monday, stocks closed mostly higher, with China's CSI 300 index rising 0.2%, Japan's Nikkei 225 adding 1% and Hong Kong's Hang Seng index climbing 0.3%. European stocks rallied 1.1%, according to the Stoxx Europe .

(END) Dow Jones Newswires

July 23, 2019 14:19 ET (18:19 GMT)

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