Here Are 3 Hot Things to Know About Stocks Right Now
- The Dow Jones Industrial Average closed higher on Friday, ending a three-day losing streak.
- Tesla (TSLA) - Get Report launched its long-delayed $35,000 Model 3 but shares fell 7.8% after CEO Elon Musk said the company probably won't be profitable in the first quarter.
- Ebay Inc. (EBAY) - Get Report will launch a strategic review of its business, with a focus on StubHub and its online classifieds business, following pressure from activist investors. The stock rose 0.54%.
Wall Street Overview
Stocks closed higher on Friday, March 1, getting a boost from bullish comments on U.S.-China trade talks from one of Donald Trump's top advisers and shrugging off downbeat economic data.
White House economic adviser Larry Kudlow said there was "fantastic" progress in trade talks last week, thanks in part to U.S. Trade Representative Robert Lighthizer reading "the riot act" to Chinese officials.
"We are heading towards a remarkable, historic deal," Kudlow predicted. "The documents are very clear: I mean, even things like the currency deal ... no manipulation; they've got to report any interventions in the market."
Bloomberg reported that U.S. officials were putting together a final trade deal for Trump and China's President Xi Jinping to sign in weeks, perhaps as soon as mid-March.
Equities also got a lift from a move by one of the market's biggest index providers to increase the weighting of China stocks on world benchmarks.
MSCI, which compiles equity benchmarks for markets around the world, will quadruple the weighting of China-listed shares, taking them to about 3.3% of the key emerging markets index from around 0.7%, between now and November. The provider said the move could unlock fresh investor inflows of around $80 billion as fund managers move to re-balance portfolios around the new benchmarks.
The Dow Jones Industrial Average rose 110 points, or 0.43%, to 26,026, the S&P 500 gained 0.69%, and the Nasdaq was up 0.83%.
The Institute for Supply Management's survey of U.S. manufacturers fell to 54.2 in February from 56.6. It was the slowest pace for manufacturing growth since November 2016.
The University of Michigan's consumer sentiment index for February also came in below economists' expectations.
Ebay Inc. (EBAY) - Get Report said Friday it will launch a strategic review of its business, with a focus on StubHub and its online classifieds business, following pressure from activist investors such as Elliott Management and Starboard Value.
Ebay said it would also look at its existing businesses from an operating point of view, as well as looking at strategic alternatives for some of its various divisions, and will add two new people to its board of directors - Jesse Cohn of Elliot and Matt Murphy of Marvel Technology.
Shares of eBay rose 0.54%.
Tesla (TSLA) - Get Report launched its long-delayed $35,000 Model 3 electric car on Thursday but the announcement was overshadowed by CEO Elon Musk saying the company probably won't be profitable in the first quarter.
Musk told reporters on a conference call that expenses associated with launching sales of its Model 3 in Europe and China as well as one-time charges during the quarter mean "we do not expect to be profitable" in the first quarter.
Tesla shares fell 7.8% in trading Friday.
The electric vehicle company said in a blog post it would move its sales operations online in a bid to save costs. The move "will enable us to lower all vehicle prices by about 6% on average, allowing us to achieve the $35,000 Model 3 price point earlier than we expected," the company said.
Tesla also said it would be winding down "many" of its stores over the next few months, "with a small number of stores in high-traffic locations remaining as galleries, showcases and Tesla information centers."
Gap Inc. (GPS) - Get Report announced plans to close more than 200 stores and split into two publicly traded companies - one for Old Navy and the other for Gap, Banana Republic and other brands. The stock rose 16.18%.
"Following a comprehensive review by the Gap board of directors, it's clear that Old Navy's business model and customers have increasingly diverged from our specialty brands over time, and each company now requires a different strategy to thrive moving forward," Chairman Robert Fisher said in a statement announcing the move.
Gap plans to separate the two companies through a tax-free spinoff - a stand-alone Old Navy and a second company which has yet to be named. Current Gap shareholders will get stock in each company once the split happens, likely in 2020.
The new company would have about $9 billion in annual revenue, according to Gap.