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Stock Market News For Feb 20, 2019

Benchmarks posted modest gains on Tuesday as another round of U.S.- China trade talks kickstarted in Washington this week. Market watchers largely expect positive outcomes from the meeting. Meanwhile, a group of U.S. states filed lawsuits against Trump’s declaration of national emergency over the border wall funding. Finally, Walmart posted splendid earnings results in the fourth quarter of 2018, boosting the overall markets.

The Dow Jones Industrial Average (DJI) increased 0.03%, to close at 25,891.32. The S&P 500 increased 0.2% to close at 2,779.76. The tech-laden Nasdaq Composite Index closed at 7,486.77, gaining 0.2%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.3% to close at 15.11. Advancers outnumbered decliners on the NYSE by a 2.14-to-1 ratio. On Nasdaq, a 1.63-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow gained 8.1 points to end the session in the positive territory. At its session highs the 30-stock index rose by as much as 78.2 points. Gains for the Dow were buoyed by a bump of 2.2% in the shares of Walmart WMT. The company posted earnings beat in the fourth quarter of fiscal 2019.

Walmart’s adjusted earnings came in at $1.41 per share, which came way ahead of the Zacks Consensus Estimate of $1.33. Further, earnings improved about 6% year over year. (Read More)

The S&P 500 added 4.2 points to also end in the green. Of the 11 major sectors of the S&P 500, nine ended in the positive territory, with materials and utilities leading the advancers. The Materials Select Sector SPDR ETF (XLB) and the Utilities Select Sector SPDR ETF (XLU) gained 0.6% each.

Meanwhile, the Nasdaq gained 14.4 points to also end in the green. Gains for the tech-laden index were buoyed by a surged in the shares of Amazon AMZN and Netflix NFLX, which gained 1.2% and 1.4%, respectively. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Positive Expectations from U.S.-China Trade Talks

The latest round of trade negotiations between the United States and China ended on Friday. Negotiators from both countries remained undecided on a few key issues. However, a fresh round of talks is slated to begin this week in Washington.

The Asian giant is planning to increase its semiconductor purchase from the United States to a total of $200 billion over the next six years. China believes such initiatives would ease up trade tensions between two of the world’s biggest economies and encourage President Donald Trump to extend the trade truce deadline further.

Meanwhile, talks between the two countries have resumed this week in Washington. Such developments boosted market sentiment as market watchers speculated that both the parties were eager to reach a deal before the March 1 deadline. Trump had tweeted over the weekend that “Big progress being made on soooo many different fronts!”

Investors also closely followed a new report that U.S. Commerce Department had submitted to the White House on Sunday. The study focusses on implications of imposing new tariffs on auto imports on national security concerns. No further details were divulged.

Lawsuit Against Trump’s National Emergency

Investors closely followed the political drama that unfolded at the White House after Trump declared a national emergency on Friday. This motive behind such a move is to secure more funding for building the border wall along America’s southern border with Mexico. Moreover, Trump also signed a spending bill on Friday which prevented another shutdown.

Meanwhile, 16 U.S. states, led by California have filed a lawsuit against Trump’s emergency on border wall funding.

Economic Data

On the economic data front, National Association of Home Builders monthly confidence index jumped to its four-month high in February. The metric gained 4 points to come in at a seasonally adjusted rate of 62 in the month.

In other news, speaking at the University of Delaware, Cleveland Federal Reserve Bank President Loretta Mester stated that she expected the overall economic and jobs growth in America to slow in 2019.

Stocks That Made Headlines

Concho Lags Q4 Earnings Estimates, Cuts Capex View

After posting a string of positive earnings surprise for several quarters, Concho Resources Inc. CXO left investors disappointed this time around when it reported fourth-quarter results on Feb 19. (Read More)

Diamondback (FANG) Q4 Earnings Miss as Crude Prices Fall

Diamondback Energy, Inc. FANG reported fourth-quarter adjusted net income per share of which was below the Zacks Consensus Estimate. (Read More)

Zacks' Top 10 Stocks for 2019

In addition to the stocks discussed above, would you like to know about our 10 finest buy-and-holds for the year?

Who wouldn't? Our annual Top 10s have beaten the market with amazing regularity. In 2018, while the market dropped -5.2%, the portfolio scored well into double-digits overall with individual stocks rising as high as +61.5%. And from 2012-2017, while the market boomed +126.3, Zacks' Top 10s reached an even more sensational +181.9%.

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Netflix, Inc. (NFLX): Free Stock Analysis Report
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Diamondback Energy, Inc. (FANG): Free Stock Analysis Report
Walmart Inc. (WMT): Free Stock Analysis Report
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