Here Are 3 Hot Things to Know About Stocks Right Now
The world's two largest economies have been locked in a trade war that has seen 25% tariffs imposed by President Donald Trump on $200 billion of Chinese products. China has retaliated with their own tariffs prompting fears of a global economic slowdown.
- The Dow Jones Industrial Average ended higher after a late-session surge Tuesday on a report that the U.S. and China would resume face-to-face trade talks.
- Shares of Snap (SNAP) - Get Report rose as the parent company of Snapchat gets ready to report earnings after the bell. Snap is Real Money's Stock of the Day.
- Coca-Cola (KO) - Get Report shares climbed after the beverage giant beat Wall Street's second-quarter earnings and sales forecasts.
Wall Street Overview
Stocks ended higher on a late-session surge Tuesday following a report that the U.S. and China would resume in-person trade talks next week and several stronger-than expected earnings reports.
The Dow Jones Industrial Average climbed 177 points, or 0.65%, to 27,349.19, the S&P 500 advanced 0.68% to 3,005.47 and the Nasdaq climbed 0.58% to 8,251.40.
American trade negotiators will head to China for face-to-face talks sometime between Friday and August 1, CNBC reported, and White House officials are eyeing a longer-term timeline to strike a deal, which could take roughly six months to reach.
Bloomberg News initially reported that in-person talks between China and the U.S. would start Monday as U.S. negotiators headed to China. The U.S. delegation will be led by Trade Representative Robert Lighthizer and will be in China through Wednesday.
Stocks got support earlier in the day from word the White House and leaders from the Senate and House of Representatives reached an agreement on a two-year budget plan that will raise the federal government's debt ceiling.
If approved by both the House and Senate, the deal likely would avoid a repeat of the government shutdowns that plagued Washington in early 2018 and again at the beginning of 2019.
Wall Street also expects the Federal Reserve to lower interest rates by at least 25 basis points when it meets at the end of July, and economists expect the European Central Bank to cut rates at its meeting Thursday.
The International Monetary Fund said in its World Economic Outlook report that the global economy is expected to expand by 3.2% in 2019, down 0.1 percentage points from its April forecast and 0.3 percentage points below the estimate at the start of the year.
The IMF cited concerns about the ongoing U.S.-China trade war and noted that "global technology supply chains were threatened by the prospect of U.S. sanctions, Brexit-related uncertainty continued, and rising geopolitical tensions roiled energy prices."
"There were positive surprises to growth in advanced economies," the report said Tuesday, "but weaker-than-expected activity in emerging market and developing economies."
Shares of Snap (SNAP) - Get Report rose 4.8% to $14.83 in the regular session ahead of the company's latest financial results. Shares surged an additional 10% to $16.32 in after-hours trading following better-than-expected results. Snap is Real Money's Stock of the Day.
Travelers (TRV) - Get Report fell 1.5% to $147.50 after the insurance company missed Wall Street's second-quarter earnings expectations as weather-induced losses triggered a higher-than-expected number of claims.
In economic news, existing home sales fell 1.7% in June to a seasonally adjusted annual rate of 5.27 million units, the National Association of Realtors said. May sales were revised higher to 5.36 million units from the 5.34 million units reported earlier. Economists polled had expected existing home sales to slip 0.2% to a rate of 5.33 million units in June.
In the energy sector, Brent crude contracts, the global benchmark, rose 71 cents at $63.97 per barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, climbed 69 cents at $56.91 per barrel.
Britain's governing Conservative Party selected Boris Johnson - a strong supporter of the Brexit campaign - as its leader and he will serve as the country's next prime minister.