Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average ended in positive territory Thursday as investors moved to discount increased trade-war saber-rattling from China.
  • Shares of Palo Alto Networks (PANW - Get Report) tumbled after the cyber security company issued weaker-than-expected guidance.
  • PVH (PVH - Get Report) shares fell after the Tommy Hilfiger and Calvin Klein brand owner trimmed its full-year earnings outlook. 

Wall Street Overview

Stocks searched for direction Thursday before ending modestly up as investors sought to discount China's latest moves to dig in for a protracted trade war with the United States.

The Dow Jones Industrial Average rose 43 points, or 0.17%, to 25,170, the S&P 500 climbed 0.21%, and the Nasdaq advanced 0.27%.

U.S. stocks have retreated more than 5.5% so far in May on concerns that Beijing's threat of tariff and trade reprisals for President Trump's increased tariffs on Chinese made goods could mean a protracted trade war.

"We finally had a 5% pullback, but the bad news is June can be a tricky month for stocks," said Ryan Detrick, senior market strategist for LPL Financial. "Going back the past 20 years, only September has been worse on average, and returns have been quite poor in June after a big drop in May."

China on Thursday accused the Trump administration of committing "economic terrorism," CNN reported, with the Ministry of Foreign Affairs charging the White House had "brought huge damage to the economy of other countries and the U.S. itself."

Amid other signs of increasing tension, Bloomberg reported that China has halted soy purchases from the U.S. And CNBC reported that Vice President Mike Pence is planning a hawkish speech around the 30th anniversary of the Tiananmen Square massacre June 4th.

The 10-year Treasury yield was at 2.21% late Thursday. Ryan Nauman, market strategist at Informa Financial Intelligence, said the drop in yields this week indicates that investors are moving defensively into Treasurys and away from equities.

Stock market pullbacks are typically brief without a recession, said Brad McMillan, chief investment officer at Commonwealth Financial Network, adding that the signs say "no recession any time soon." 

"We have never had a recession with job growth where it is," McMillan said. "We have never had a recession when consumer confidence is this high...We have never had a recession with business confidence where it is. And we have never had a recession without an initial yield curve inversion. So, will we have a recession? At some point, certainly. But right now we are at a yellow light, not a red one."

PVH  (PVH - Get Report) shares fell 14.9% to $84.49 after the Tommy Hilfiger and Calvin Klein brand owner trimmed its full-year earnings guidance. PVH is Real Money's Stock of the Day.

Shares of Palo Alto Networks (PANW - Get Report) tumbled 5.1% to $204.30 after the cyber security company beat Wall Street's third-quarter earnings forecast but issued weaker-than-expected guidance.

Dollar General (DG - Get Report) climbed 7.2% to $127 after the discount retail chain reported quarterly earnings that surpassed analysts' expectations.

Shares of discount variety store chain Dollar Tree Stores ( DLTR - Get Report)  rose 3.1% to $98.31 after the company reported fiscal first-quarter earnings that matched analysts' forecasts but lowered its guidance for the second quarter and fiscal year.
 
Burlington Stores ( BURL - Get Report) shares rose nearly 7% to $156.03 after the company beat Wall Street's first-quarter earnings expectations, but missed on same-store sales.
 
The board of CBS  ( CBS - Get Report) is preparing for merger talks with Viacom ( VIA - Get Report) , CNBC reported, citing people familiar with situation. Talks are expected to begin in mid-June, though discussions could begin even sooner, the sources said. Viacom CEO Robert Bakish would likely run the combined entity. Shares of CBS rose 3.2% to $48.20, while Viacom advanced 5.5% to $34.18.
 
Meanwhile, the U.S. economy grew at a 3.1% annual pace during the first three months of the year, the Commerce Department said, slightly slower than initially estimated.

The Labor Department said Thursday that initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 215,000 for the week ended May 25. Data for the prior week was revised to show 1,000 more applications received than previously reported.

Pending home sales fell a seasonally adjusted 1.5% in April and were 2% lower than a year ago, the National Association of Realtors said Thursday. April marked the 16th-straight month of annual declines.

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