Here are five things you must know for Tuesday, Jan. 8:
1. -- Stock Futures Rise on Optimism Over U.S.-China Trade Talks
U.S. stock futures rose on Tuesday, Jan. 8, and global stocks steadied as U.S. and Chinese officials met for a second day of trade talks in Beijing.
Comments from both sides suggested cautious optimism that a deal on trade can be struck ahead of a March 1 deadline established by Donald Trump and Chinese President Xi Jinping last month at the G-20 summit in Argentina.
However, a weaker-than-expect profit forecast from Samsung Electronics Co. (SSNLF) added further to concerns over the health of the tech sector and capped gains in Asia.
Contracts tied to the Dow Jones Industrial Average rose 170 points, futures for the S&P 500 gained 15.75 points, and Nasdaq futures were up 41 points.
Stocks finished higher Monday amid the improved prospects for a trade agreement between the U.S. and China. The Dow gained 98 points, or 0.42%, to 23,531, the S&P 500 rose 0.7%, and the Nasdaq ended the session up 1.26%. Amazon.com Inc. (AMZN - Get Report) gained 3.4% on Monday and closed with a market value of nearly $797 billion, making the online retailing giant the most valuable company in the world, surpassing Microsoft Corp. (MSFT - Get Report) .
The economic calendar in the U.S. on Tuesday includes the Job Openings and Labor Turnover Survey for November at 10 a.m. ET. International Trade for November - expected to be released Tuesday - will be delayed by the government shutdown.
2. -- Samsung Tumbles on Profit Warning
Shares of Samsung Electronics fell 1.7% in Seoul on Tuesday after the world's biggest smartphone maker forecast weaker-than-expected fourth-quarter profit, citing a slowdown in China demand, the same factor that triggered a sales warning last week from rival Apple Inc. (AAPL - Get Report) .
Samsung said profit for the three months ended in December would likely come in at around 10.8 trillion Korean won ($9.67 billion), well shy of market expectations of 13.2 trillion won. Group sales likely will fall 11% to 59 trillion won.
The company will issue its fourth-quarter report later in January.
"Operating profits sharply decreased due to lackluster demand in the memory division and intensifying competition in the smartphone sector," Samsung said in a rare explanatory statement that accompanied the earnings forecast. "Memory demand will rebound in the second half with the release of new CPUs and smartphones."
"In the mid and long term, the supply and demand will be in balance as technical barriers and capital intensity will put pressure on the supply side," the statement added. "As more smartphones are expected to have OLED panels, the display business will explore ways to diversify its market."
South Korea's other tech giant, LG Electronics Inc., also issued a much weaker-than-expected fourth-quarter profit forecast, sending shares lower and raising deeper concerns for the health of the consumer electronics sector.
3. -- Qualcomm Highlights Automotive Wins at CES
Qualcomm Inc. (QCOM - Get Report) highlighted its momentum in a growing automotive chip market via its organic investments at a press conference Monday at the Consumer Electronics Show in Las Vegas, which runs this week through Friday, Jan. 11.
A year after disclosing at CES it had a $3 billion automotive order pipeline, Qualcomm said the pipeline was now above $5.5 billion. The company added it has now landed infotainment and "digital cockpit" design wins with 18 of the world's top 25 automakers, wrote TheStreet's Eric Jhonsa.
While it has long been a major supplier of cellular modems for automakers, Qualcomm only recently has become a leading supplier of infotainment processors -- Nvidia Corp. (NVDA - Get Report) , via its Tegra processor line, has been a major player in the segment for some time.
Qualcomm used its event to unveil what it called its third-generation Snapdragon Automotive Cockpit platforms, and noted its efforts to support the budding cellular vehicle-to-everything (C-V2X) market, which aims to enable solutions that let cars obtain information and safety alerts from other cars, as well as radios built into nearby infrastructure.
4. -- PG&E Falls After Credit Rating Is Cut to Junk
PG&E Corp. (PCG - Get Report) fell 2.6% in premarket trading after S&P Global Ratings cut the credit rating of the California utility to junk status as it grapples with billions in costs associated with last year's wildfires in northern California.
S&P lowered PG&E's credit rating to single-B, two notches below the investment grade threshold, affecting around $18 billion in outstanding bonds.
The stock fell more than 22% on Monday following a report from Reuters that said the company was exploring bankruptcy to cope with massive liabilities from fatal wildfires blamed on its equipment.
PG&E warned investors in November that it faced "significant" liability, over and above its insurance capacity, if its equipment was found to have started the deadly Camp Fire that started in Paradise, Calif., and spread through much of northern California, killing at least 86 people and causing billions in economic and environmental damage.
"We expect that negative public sentiment and the increased political pressure will challenge the regulators' willingness and ability to implement measures to protect credit quality over the near term," S&P said. "We could also lower the ratings by one or more notches if management does not clearly articulate specific steps it will take to preserve credit quality over the long term."
5. -- SoftBank Scales Back Plans to Invest in WeWork
SoftBank Group Corp. (SFTBY) reportedly has cut back on its plans to invest in privately held WeWork Cos., opting against taking a controlling stake in the operator of co-shared office spaces.
SoftBank will put an additional $2 billion into WeWork, on top of the $8 billion it already has invested, Bloomberg reported, citing people familiar with the situation.
In October, reports surfaced that SoftBank was considering investing between $15 billion and $20 billion in WeWork.
The earlier plan to acquire a majority stake in WeWork would have been one of the largest ever investments in a private tech startup, according to The Wall Street Journal.
Executives at both companies had been in advanced discussions, and as of late December they had planned to announce the landmark deal Tuesday, people familiar with the matter told the Journal.
The exact reason for the pared-back investment was unclear, though the deal faced significant hurdles, the Journal noted.