Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average turned lower on Monday as U.S. trade talks with China were set to resume. The index rose 0.2% last week and has risen for seven straight weeks.
- Restaurant Brands International Inc. (QSR - Get Report) posted stronger-than-expected fourth-quarter earnings and boosted its 2019 dividend target to $2 a share. The stock rose 1.6%.
- Tesla Inc. (TSLA - Get Report) was up 2.3% after Canaccord Genuity lifted its recommendation on the stock to buy from hold and raised its price target to $450 from $330.
Wall Street Overview
Stocks were mixed on Monday, Feb. 11, as investors eyed progress in this week's renewed U.S.-China trade talks.
U.S. Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer arrived in Beijing for trade talks Sunday that will focus on structural reforms and intellectual property protections in the world's second-largest economy. Negotiators are racing to meet the March 2 deadline when tariffs on $200 billion worth of China-made goods could increase to 25% from 10%.
With that in mind, investors also will watch for any mention of risks from China tariffs from a host of retail-focused earnings this week, the final major round of reporting for the December quarter. Walmart Inc. (WMT - Get Report) , Home Depot Inc. (HD - Get Report) , Lowe's Cos. (L - Get Report) , Coca-Cola Co. (KO - Get Report) , PepsiCo Inc. (PEP - Get Report) and Macy's Inc. (M - Get Report) will be issuing earnings reports this week.
U.S. investors also will focus on talks between Republican and Democratic lawmakers this week as the two sides attempt to broker an agreement that will prevent another government shutdown on Friday.
Mick Mulvaney, acting White House chief of staff, said on Fox News Sunday that "the government shutdown is technically still on the table -- we do not want it to come to that, but that option is still open to the president and will remain so."
The Dow Jones Industrial Average was down 53 points, or 0.21%, to 25,053, the S&P 500 was up 0.07%, and the Nasdaq rose 0.13%.
Three of the Dow's biggest losers were in the healthcare sector Monday, led by UnitedHealth Group (UNH - Get Report) , which fell 1.8%, while Pfizer Inc (PFE - Get Report) dropped 1.3% and Merck & Co. (MRK - Get Report) declined 1%.
Restaurant Brands International Inc. (QSR - Get Report) posted stronger-than-expected fourth-quarter earnings and boosted its 2019 dividend target to $2 a share as same-store sales for its Tim Hortons division led gains for the company. The stock rose 1.6%.
Restaurant Brands said adjusted earnings for the quarter were 68 cents a share, 1 cent ahead of Wall Street forecasts. Revenue rose 14.55% to $1.39 billion, a figure that fell largely in-line with analysts' forecasts.
Burger King's comparable sales rose 1.7%, Tim Hortons posted a same-stores sales increase of 1.9%, while Popeyes Louisiana Kitchen recorded a comparable-store sales increase of 0.1% in the quarter, missing expectations.
The firm argued that electric vehicle penetration in markets around the world isn't fully appreciated by investors on Wall Street. Canaccord also said it wasn't concerned about an upcoming conversion of a bond issue, given Tesla's solid operating cash flow levels and its current cash balance of around $3.7 billion.
"We believe the last two quarters and recent guidance for Q1 have removed significant concerns for both production capability and profitability of the critical Model 3. As such, we see a more stable 2019 with far fewer concerns for investors in the company," said Canaccord analyst Jed Dorsheimer. "We view the recent string of price cuts as further proof that the cost cutting and right sizing that the company has undertaken are resulting in concrete movement towards the ultimate goal of an affordable $35,000 Model 3."
The firm also reiterated its "overweight" rating, which it has had on the company for nearly two years.
"Boeing is among the companies best positioned to benefit from positive aero fundamentals, and the company is consciously trying to shape the industry to capture more value for itself, which could mean strong relative performance and potential upside to estimates," said analyst Seth Seifman. "Finally, while sentiment has improved, we do not believe BA is 'over-owned.'"
NuVasive Inc. (NUVA - Get Report) jumped 13.26% Monday to $56.93 following a report that said Smith & Nephew PLC (SNNUF) had held talks to buy the maker of medical instruments used in spinal surgery in a deal that would be worth more than $3 billion.
The deal would mark the largest acquisition by Smith & Nephew, the British medical devices company, the Financial Times reported, citing people with direct knowledge of the talks said.
NuVasive, based in California, has a market value of about $2.5 billion, excluding debt of about $500 million. NuVasive told the Financial Times the company "does not comment on market speculation or rumors."