Here Are 3 Hot Things to Know About Stocks Right Now
- The S&P 500 hit at a record high amid signs of further progress in U.S.-China trade talks, the expectation of rate cuts from the Federal Reserve later this week, and another wave of corporate earnings.
- AT&T (T) - Get Report climbed after the telecommunications giant posted stronger-than-expected third-quarter earnings. AT&T is Real Money's Stock of the Day.
- Microsoft (MSFT) - Get Report was climbing and set a record high after the Pentagon awarded a controversial 10-year, $10 billion contract for cloud computing services to the software giant.
Wall Street Overview
Stocks finished higher Monday, pushing the S&P 500 to a record closing high, amid signs of further progress in U.S.-China trade talks, the expectation of rate cuts from the Federal Reserve later this week, and another wave of corporate earnings.
The S&P 500 rose 0.56% to a record close of 3,039.42, beating the previous high of 3,027.98 record set on July 26. The Dow Jones Industrial Average finished up 132 points, or 0.49%, to 27,090, while the Nasdaq climbed 1.01% on strong tech earnings.
Earlier in the session, President Donald Trump announced the S&P 500's record-breaking news on Twitter, saying "The S&P just hit an ALL TIME HIGH."
"This is a big win for jobs, 401-K's, and, frankly, EVERYONE!" Trump wrote. "Our Country is doing great. Even killed long sought ISIS murderer, Al-Baghdadi. We are stronger than ever before, with GREAT upward potential. Enjoy!"
"October 28 is historically the best day of the year for stocks," said Ryan Detrick, senior market strategist for LPL Financial. "It kicks off the best six months of the year (November-April) and says goodbye to the worst six months. Lastly, the last few days of October to the first few days of November is one of the strongest times of the year."
With 200 companies in the S&P 500 having reported so far, LPL Financial said, third-quarter earnings growth is tracking to a 3.8% year-over-year decline.
"Equities are striding to new all-time highs as optimism is hitting investors from all directions," said Charlie Ripley, senior investment strategist for Allianz Investment Management. "On one side, there appears to be further progress on the first phase of a trade deal with China as both sides are on track to sign an agreement at an upcoming meeting in Chile next month. On another, we have a supportive Fed who is widely expected to provide additional stimulus to the economy in the form of another insurance rate cut this Wednesday."
Lastly, Ripley said, the bar was set very low going into the third-quarter earnings season and with the companies that have reported thus far, optimism looks to be feeding off of better-than-expected results.
"Against this backdrop, we would expect market optimism to continue to improve which is particularly important as we head into the holiday spending season," Ripley said.
The U.S. Trade Representative's statement late Friday, which said Washington and Beijing were "close to finalizing some sections of the agreement" and that "discussions will go on continuously at the deputy level, and the principals will have another call in the near future" suggested the so-called phase one aspect of U.S.-China trade talks could be completed ahead of next month's APEC summit in Chile. U.S. President Donald Trump and his Chinese counterpart, Xi Jinping, are expected to meet at the summit.
"There were a lot of headwinds facing corporate earnings this quarter but with 80% of S&P 500 companies reporting a positive EPS surprise, it's helped put some juice into the market," said Mike Loewengart, vice president of investment strategy with E*Trade. "Trade, a consistent market mover, has seen some progress which has also likely helped today's market movement. That said, if there is one thing the market has taught us, it's that it can turn on a dime. We have a jam-packed economic calendar this week, most notably the Fed decision, jobs data, Q3 GDP, and big-name tech earnings."
In addition, the Federal Reserve will meet this week with a decision on interest rates Wednesday afternoon. The central bank is expected to cut its key lending rate by 25 basis points - the third such reduction this year - and pledge it will trim rates further if the economy continues to cool into the final months of the year.
Overseas, the European leaders agreed in principle to extend Brexit until Jan. 31, so the United Kingdom will not leave as planned on Thursday.
Microsoft (MSFT) - Get Report lead the Dow's advance, climbing 2.5% to $144.19 after the Pentagon awarded a controversial 10-year, $10 billion contract for cloud computing services to the software giant.
AT&T (T) - Get Report climbed 4.3% to $38.49 after the telecommunications giant posted stronger-than-expected third-quarter earnings. AT&T is Real Money's Stock of the Day.
Tiffany (TIF) - Get Report was the S&P 500's biggest winner, surging 31.2% to $129.73 after LVMH (LVMHF) , the owner of Louis Vuitton, confirmed that it had offered to acquire the iconic brand.
In economic news, a survey of U.S. companies by the National Association for Business Economics (NABE) found that only 20% surveyed said their firms have made additional hires in the last three months, compared to one in three in July.
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