Here Are 3 Hot Things to Know About Stocks Right Now

  • The Dow Jones Industrial Average finished up Thursday after Chinese trade officials said they wouldn't immediately retaliate against the latest round of tariffs announced by President Donald Trump, but left the door open for reprisals should negotiations break down.
  • Burlington Stores (BURL) climbed after the company beat Wall Street's quarterly sales and earnings estimates. Burlington Stores is Real Money's Stock of the Day.
  • Best Buy (BBY)  fell after the electronics retailer posted better-than-expected earnings for the second quarter and raised its profit outlook for the full year, but missed Wall Street's quarterly sales expectations.

Wall Street Overview

Stocks surged to the finish line Thursday after Chinese trade officials said they wouldn't immediately retaliate against the latest round of tariffs announced by President Donald Trump, but left the door open for reprisals should negotiations between the world's two largest economies break down.

The Dow Jones Industrial Average rose 326 points, or 1.25%, to 26,362, the S&P 500 advanced 1.27%, and the Nasdaq climbed 1.48%.

"Equities are higher this afternoon as dealers are cautiously optimistic about the state of U.S.-China trade relations," said David Madden, a market analyst at CMC Markets UK.

"The commentary from Beijing earlier has set the tone on Wall Street. The U.S. posted largely positive economic reports (Thursday). Second-quarter GDP was revised lower to 2% from 2.1%, and the revision was in line with economists' expectations. The jobless claims rate was 215,000, which was a slight ticker from the 209,000 recorded last week, but the jobs market is still in good health."

Madden noted that pending homes sales in July slipped by 2.5%, which he said was a worrying sign "as there has been some evidence the housing market has been cooling, and Thursday's update underlines that view."

Caterpillar (CAT) , Intel (INTC) , and JP Morgan Chase (JPM) led the Dow's advance. Boeing (BA)  and Deere  (DE) , two companies also strongly affected by the U.S.-China trade battle, also climbed.

Trump said on Thursday that the two countries were set to have trade talks Thursday "at a different level."

"There's a talk scheduled for today at a different level," Trump said in an interview on Fox News Radio. "Let's see what the end product is, that's what you have to judge it by." Trump didn't explain what he meant by "a different level."

China's Ministry of Commerce spokesman Gao Feng said earlier Thursday that "China has ample means for retaliation, but thinks the question that should be discussed now is about removing the new tariffs to prevent escalation of the trade war," according to Bloomberg.

"Escalation of the trade war won't benefit China, nor the U.S., nor the world," Gao said. "The most important thing is to create the necessary conditions for continuing negotiations."

Meanwhile, China is studying its tech companies to determine their exposure to American suppliers, The Wall Street Journal reported, citing people familiar with the matter. 

Officials from China's National Development and Reform Commission, Ministry of Industry and Information Technology and Ministry of Commerce have been in contact with domestic tech firms to determine their supply chain structure, the Journal said, citing people familiar with the matter.

The Journal also reported Thursday that U.S. prosecutors are investigating new instances of alleged technology theft by Chinese telecommunication equipment maker Huawei Technologies. The company is accused of stealing intellectual property from individuals and companies over several years, and recruiting employees from its rivals.

The Commerce Department in May issued a ban against Huawei, the world's largest telecommunications company, placing it and its affiliates on an export blacklist, citing national-security concerns. Huawei was later granted a 90-day extension of a license that has enabled the company to continue working with U.S. companies.

In January, the U.S. Justice Department charged Huawei and its chief financial officer, Meng Wanzhou, with conspiring to violate U.S. sanctions on Iran.

Treasury Secretary Steven Mnuchin said U.S. trade officials expect Chinese negotiators to visit Washington, Bloomberg reported, but would not say whether a previously planned meeting would take place.

Trump said last week that tariffs to be imposed on Sept. 1 on $300 billion in goods imported from China would now be 15%, up from 10%.

In addition, tariffs on $250 billion in goods that have been at 25% will rise to 30% on Oct. 1. Trump was responding to China's announcement it would impose tariffs on more than 5,000 U.S. products, including soybeans and petroleum, worth a combined $75 billion.

Shares of Burlington Stores (BURL) climbed 18.6% to $205.47 after the discount clothing and home furnishings chain beat Wall Street's quarterly sales and earnings estimates. Burlington Stores is Real Money's Stock of the Day.

Best Buy ( BBY) shares tumbled 8% to $63.49 after the electronics retailer posted better-than-expected earnings for the second quarter and raised its profit outlook for the full year, but missed Wall Street's quarterly sales expectations.
 
Shares of Dollar General ( DG)  surged 10.7% to $156.12 after the discount retail chain posted fiscal second-quarter earnings and sales that surpassed analysts' forecasts and raised its guidance.
 
Dollar Tree ( DLTR) shares fell 1.9% to $97.67 even though the discount variety retail chain beat Wall Street's second-quarter earnings expectations.
 
Shares of Abercrombie & Fitch ( ANF)  fell 15.2% to $14.44 after the fashion retailer posted a fiscal second-quarter loss that was narrower than analysts' forecasts but provided subdued forward guidance.
 
Guess ( GES) shares leaped 20.5% to $18.12 after the designer and retailer of apparel and accessories reported stronger-than-expected fiscal-second-quarter results and raised its outlook for the full year.

In economic news, gross domestic product increased at a 2% annualized rate, the Commerce Department said in its second reading of second-quarter GDP. The growth pace compared with an initially estimated 2.1%. Economists had expected no change in the estimate.
 
"In general, GDP is decidedly down from last year," said Mike Loewengart, vice president of investment strategy at E*Trade. "Ongoing trade tensions and slowing global growth continue to put pressure on US performance. While there is no doubt that the economy is cooling, taking this morning's read into historical context, we're actually still chugging along though."

"There remains a solid backdrop of fundamentals, Loewengart added, "and especially within the context of the strong retail numbers we've seen recently, the personal consumption beat is yet another sign that consumers continue to open their wallets, spend, and support our economy."

The trade deficit in goods narrowed to $72.3 billion in July from $74.2 billion in the prior month, the Commerce Department said. Economists were expecting a $75 billion estimate.

Pending home sales fell 2.5% in July month-to-month and were 0.3% lower compared with July 2018, the National Association of Realtors said.

Oil prices were rising throughout the day. Brent crude contracts were up 45 cents at $60.38 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were 77 cents higher at $56.55 a barrel.

Burlington Stores, Caterpillar, and JPMorgan Chase are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells these stocks? Learn more now.

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