Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average finished higher Wednesday after the withdrawal of an extradition bill in Hong Kong and a move to avoid a no-deal Brexit in Britain helped put investors in a buying mood.
- Starbucks (SBUX - Get Report) shares fell after the world's biggest coffee chain indicated that 2020 earnings growth could slip below its previous forecasts.
- American Eagle Outfitters (AEO - Get Report) shares tumbled after the specialty retailer beat Wall Street's second-quarter earnings expectations, but reported a slowdown in same-store sales.
Wall Street Overview
Stocks ended the day higher Wednesday after the withdrawal of an extradition bill in Hong Kong and easing of Brexit tensions in Britain helped put investors in a buying state of mind.
The Dow Jones Industrial Average rose 237 points, or 0.91%, to 26,355, the S&P 500 climbed 1.08%, and the Nasdaq advanced 1.30%.
Hong Kong Chief Executive Carrie Lam formally withdrew the extradition bill that has triggered moths of protests in the China-controlled territory in a move that could ease tensions in one of Asia's key financial hubs.
In Britain, members of parliament voted for a bill intended to block a "no-deal" exit from the Europe Union. The bill forces Prime Minister Boris Johnson to ask for an extension beyond the 31 October Brexit deadline if a deal has not been agreed with the EU. Johnson called upon MPs to back his plan to hold an early general election on October 15.
Shares of Apple (AAPL - Get Report) rose 1.7% to $209.19. The tech giant plans on introducing a cheap new iPhone next spring to address declining market share, according to a report from Japan's Nikkei news service. The phone is believed to be a successor to the iPhone SE.
American Eagle Outfitters (AEO - Get Report) shares tumbled 11.7% to $14.37 after the specialty retailer beat Wall Street's second quarter earnings expectations, but reported a slowdown in same-store sales.
Shares of Tapestry (TPR - Get Report) rose 5.1% to $21.49 after the owner of Coach, Kate Spade and other luxury brands said its long-time CEO, Victor Luis, was leaving the luxury clothing and accessories maker after 13 years at its helm.
Tyson Foods (TSN - Get Report) shares fell 7.8% to $86.04 after the worldwide food company cut its 2019 earnings forecast, noting "discrete challenges" to its business and and costs linked to food safety initiatives.
Palo Alto Networks (PANW - Get Report) shares rose slightly to $200.50 as the security provider prepares to report fiscal fourth-quarter earnings after the closing bell and speaks with analysts at an event in New York City.
In economic news, the U.S. trade deficit narrowed by 2.7% in July to $54 billion, in line with economists' forecasts, the Commerce Department's Bureau of Economic Analysis said. Exports climbed by 0.6%, while imports decreased by 0.1%.
The Federal Reserve's Beige Book survey found that the overall economy expanded at the same "modest pace" seen in earlier reports this year. A majority of business owners remain optimistic about the near-term outlook, despite uncertainty over the U.S. trade policy with China.
"Reports on consumer spending were mixed, although auto sales for most Districts grew at a modest pace. Tourism activity since the previous report remained solid in most reporting Districts," the Federal Reserve said.
The yield curve returned to normal as the 10-year Treasury yield traded above the two-year yield. The inverted yield curve between the two-year and 10-year note often is seen as a warning sign about a recession.
Oil prices were climbing throughout the day, sparked by favorable economic data from China.
A private survey of China's services sector found that it grew in August at the fastest rate in three months. Brent crude contracts were up $2.53 to $60.79 a barrel, while West Texas Intermediate contracts, which are more tightly linked to U.S. gas prices, were $2.41 higher at $56.35 a barrel.