By Sue Chang, MarketWatch , Ryan Vlastelica
Tesla shares drop on report of Justice Department probe
U.S. stocks rose Tuesday, with investors shrugging off
escalating trade tensions to instead focus on an economy that
remains strong by many measures. The gains were led by consumer
discretionary and technology shares, two sectors that had slumped
in the previous session.
Where are the major benchmarks trading?
The Dow Jones Industrial Average rose 168 points, or 0.6%, to
26,229. The S&P 500 index advanced 16 points, or 0.6%, to 2,905
and the Nasdaq Composite Index climbed 62 points, or 0.8%, to
7,958.
Stocks had declined Monday, marking the biggest one-day drop for
the S&P since mid-August and the worst session for the Nasdaq
since late July.
What's driving the market?
President Donald Trump late Monday said he would impose new
tariffs
(http://www.marketwatch.com/story/trump-to-impose-another-200-billion-in-tariffs-on-chinese-goods-2018-09-17)
on about $200 billion in Chinese goods. He also threatened
additional penalties as part of his campaign to pressure Beijing to
change its commercial practices.
See:China-U.S. trade war will last for 'maybe 20 years,' says
China's best-known CEO
(http://www.marketwatch.com/story/china-us-trade-war-will-last-for-maybe-20-years-says-chinas-best-known-ceo-2018-09-18)
In response, China retaliated with tariffs of 5% to 10%
(https://www.wsj.com/articles/chinese-officials-scramble-to-respond-to-trumps-new-tariffs-1537275015?)
on $60 billion worth of U.S. products that will take effect Sept.
24 and said it may introduce more measures if the U.S. goes ahead
with higher tariffs, according to The Wall Street Journal.
Read:Trade war's 'nuclear option' could be bad for Apple,
Amazon: strategist
(http://www.marketwatch.com/story/trade-wars-nuclear-option-could-be-bad-for-apple-amazon-strategist-2018-09-18)
Trade has been a headline risk for months, and while it has
increased day-to-day volatility, the broad indexes have largely
ground higher, supported by strong growth in corporate earnings and
improving economic data.
What are analysts saying?
"In my opinion, I see President Trump as trying to force the
trading partners to the bargaining table to renegotiate trade deals
that have long favored other countries over the U.S. His methods
are unconventional but the U.S. economy is strong, earnings are
healthy and confidence among consumers and investors remains high,"
wrote Robert Pavlik, chief investment strategist at SlateStone
Wealth, in a note to clients.
"Trump promised to take on trade during his run for presidency
and with the recent announcement that the U.S. intends to raise the
amount of products coming under tariff inclusion will ensure that
this is an issue that will not go away quietly but we remain
hopeful that eventually these tactics remain in check and will
conclude amicably and without a lasting negative impact to global
growth," he said.
Louis Kuijs, head of Asia economics at Oxford Economics, said
that the trade war may be prolonged as the U.S. government seems
confident about winning and as a result, be reluctant to consider
concessions to de-escalate the conflict.
What stocks are in focus?
Tesla Inc.(TSLA) shares slid 2.9% after Bloomberg reported that
the electric car company is under investigation by the Justice
Department
(http://www.marketwatch.com/story/tesla-stock-tanks-after-report-company-faces-criminal-probe-over-musks-tweet-2018-09-18-121035917)
over tweets from Chief Executive Elon Musk last month about taking
the company private.
Shares of Oracle Corp. (ORCL) rose 0.3% a day after the software
company reported quarterly revenue that missed expectations
(http://www.marketwatch.com/story/oracle-earnings-show-another-cloud-miss-stock-falls-2018-09-17),
hurt by weaker-than-expected cloud-services sales.
Visa Inc.(V) and Mastercard Inc.(MA)agreed to settle a
class-action lawsuit
(http://www.marketwatch.com/story/visa-mastercard-settle-us-retailers-class-action-suit-2018-09-18)
brought by U.S. retailers in 2005. Shares of Visa rose 0.8% while
Mastercard rose 1.4%.
General Mills Inc.(GIS) slumped 7.9% after it reported revenue
below forecasts even though adjusted first-quarter earnings beat
expectations
(http://www.marketwatch.com/story/general-mills-tops-profit-estimate-as-sales-fall-slightly-short-2018-09-18).
AutoZone Inc. (AZO) fell 2.8% after it reported adjusted
fourth-quarter earnings that beat expectations while revenue came
in below forecasts. Same-store sales also grew less than had been
expected
(http://www.marketwatch.com/story/autozones-stock-sinks-after-profit-beats-but-sales-miss-2018-09-18).
Red Hat Inc.(RHT) shares fell 1.1% after it was downgraded to
neutral by JPMorgan analysts.
Viking Therapeutics Inc. (VKTX) surged 81% after it reported
positive results
(http://www.marketwatch.com/story/viking-therapeutics-announces-positive-results-in-trial-of-non-alcoholic-fatty-liver-treatment-2018-09-18)
in a midstage trial of a treatment for nonalcoholic fatty liver
disease.
What are other markets doing?
Asian stocks rallied as investors shrugged off the latest news
on tariffs
(http://www.marketwatch.com/story/asian-markets-mostly-shrug-off-latest-us-tariffs-targeting-china-2018-09-17).
However, the region has struggled lately, and recently traded at
four-year lows. Major European indexes were mostly higher
(http://www.marketwatch.com/story/europe-stocks-limp-along-dented-by-trade-war-headlines-2018-09-18).
Crude-oil prices saw strong gains
(http://www.marketwatch.com/story/oil-rallies-as-saudi-arabia-said-to-grow-comfortable-with-crude-above-80-a-barrel-2018-09-18)
and gold edged lower
(http://www.marketwatch.com/story/gold-churns-above-1200-as-dollar-stocks-react-cautiously-to-deepening-trade-fight-2018-09-18).
The U.S. dollar index was moderately higher
(http://www.marketwatch.com/story/dollar-finds-footing-as-us-china-trade-fight-intensifies-2018-09-18).
(END) Dow Jones Newswires
September 18, 2018 14:04 ET (18:04 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.