U.S. stocks rose modestly at the start of trade Tuesday, as investors continued to eye U.S.-China trade tensions after returning from a long holiday weekend.
How are the major benchmarks faring?
The Dow Jones Industrial Average DJIA, +0.42% was up 112 points, or 0.4%, at 25,701, while the S&P 500 index SPX, +0.41% rose 12 points, to 2,838, a 0.4% advance. The Nasdaq Composite Index COMP, +0.56% added 50 points, or 0.7%, to trade at 7,687.
U.S. financial markets were closed Monday for Memorial Day. Stocks ended higher Friday but booked losses for the week, extending the Dow’s weekly losing streak to five, its longest since June 2011. The Dow saw a 0.7% weekly fall, while the S&P 500 saw a 1.2% retreat and the Nasdaq Composite gave up 2.3%.
What’s driving the market?
The major indexes remain solidly higher for the year to date but retreated significantly in May as U.S.-China trade tensions heated up. Washington and Beijing have engaged in a round of tit-for-tat tariff escalations, while the Trump administration has moved to blacklist exports to Chinese technology firm Huawei, prompting threats of further retaliation by China.
Read: How stock-market bulls are adjusting to the threat of a messier U.S.-China trade war
President Donald Trump, speaking at a joint news conference Monday in Tokyo with Japanese Prime Minister Shinzo Abe, said the U.S. wasn't ready to make a trade deal with China.
“They (China) would like to make a deal. We’re not ready to make a deal,” Trump said, according to Bloomberg. He added that tariffs on Chinese products could go up “very substantially.”
Deal news was also in focus after Fiat Chrysler Automobiles NV FCAU, +7.67% unveiled a merger proposal Monday that would combine the company with French rival Renault SA RNO, +1.50% creating the world’s third-largest auto maker by production. U.S.-traded shares of Fiat were up 8.3%.
Worries about Italy were back on the radar for European investors after the country’s euroskeptic party fared well in European Parliament elections over the weekend. Italian banks fell, contributing to a weaker tone across European markets.
What are analysts saying?
“We’ve been with a short-term negative trading bias since ‘The Tweet’ of a few Sundays ago, and that kick in the pants has yet to produce anything for bulls to again celebrate,” said Rick Bensignor of Bensignor Investment Strategies, in a note, referring to Trump’s May 5 tweet threatening to raise tariffs on $200 billion of Chinese goods from 10% to 25% — a threat that was later carried out.
Since then, the S&P 500 “has been rangebound, and hasn’t been able to progress back above 2890 nor break to new lows beneath 2801,” Bensignor said.
Which stocks are worth watching?
Global Payments Inc. GPN, -0.55% and Total Systems Services Inc. TSS, +7.46% announced an all-stock merger of equals Tuesday, valued at $21.5 billion. The transaction values Total Systems Services at $119.86, or a roughly 20% premium from Friday’s closing price. Shares of Global Payments fell 1.2%, while Total Systems shares rose 8% to $122.53.
Shares of Alibaba Group Holding Ltd. BABA, +0.25% could be in focus Tuesday, after reports Monday that the Chinese e-commerce giant is planning to raise as much as $20 billion through a listing of public shares in Hong Kong. The stock rose 1.2% early Tuesday.
Shares of FedEx Corp. FDX, -0.29% were down 0.8%, after Reuters reported that Huawei was reviewing its relationship with the company after it claimed that the logistics giant rerouted packages destined for Huawei addresses in Asia to the U.S.
What economic data are in focus?
Home prices rose in March by 0.1%, compared with February and 2.7% compared with last year, according to the S&P CoreLogic Case-Shiller 20-city index. That’s the slowest annual pace of growth since August of 2012.
The Conference Board’s May reading on consumer confidence will be released at 10 a.m. Eastern Time.
How are other markets trading?
Stocks in Asia closed mostly higher on Tuesday, with Japan’s Nikkei 225 NIK, +0.37% rising 0.4%, Hong Kong’s Hang Seng Index HSI, +0.38% adding 0.5% and China’s Shanghai Composite Index SHCOMP, +0.61% advancing 0.4%. In Europe SXXP, +0.03% stocks were trading mostly lower.
In commodities markets, the price of crude oil CLN19, +0.53% was on the rise, while gold GCN19, -0.54% edged lower. The U.S. dollar DXY, +0.15% meanwhile, ticked higher relative to its peers.
https://www.marketwatch.com/story/stock-index-futures-edge-lower-as-trade-worries-hang-over-market-2019-05-28
2019-05-28 12:20:00Z
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