3-6-18 7:03 AM EST | Email Article

By Barbara Kollmeyer, MarketWatch

Three Fed speakers ahead, while Target, Dollar Tree report earnings

U.S. stock futures bolted higher early Tuesday, with traders bolstered by encouraging headlines from talks between North and South Korea, reportedly including plans for the first summit in a decade next month.

Stocks had firmed on push back against the Trump administration's tariff plan from key Republicans such as House Speaker Paul Ryan. Investors were looking ahead to a trio of Federal Reserve speakers, and to key earnings reports from Target Corp. and Dollar Tree Inc.

What are the main benchmarks doing?

Roughly doubling earlier gains, futures for the Dow Jones Industrial Average jumped 157 points, or 0.6%, to 25,020. Those for the S&P 500 index gained 13.85 points, or 0.5%, to 2,731.75. Futures for the Nasdaq-100 Index rose 44.75 points, or 0.7%, to 6,922.75.

The Dow finished up 336.70 points, or 1.4%, to 24,874.76 on Monday, bouncing back from a four-session losing streak. The S&P 500 index and Nasdaq Composite Index added 1.1% and 1%, respectively, in what some were calling a technical rebound after a stretch of weakness for equities.

Opinion:This technical chart says the stock market is headed for another big drop (http://www.marketwatch.com/story/this-technical-chart-says-the-stock-market-is-headed-for-another-big-drop-2018-03-05)

What is driving the markets?

Stock futures took an additional step higher after South Korea's presidential office reportedly said the two Koreas will hold their first summit in more than a decade in late April (http://www.marketwatch.com/story/north-south-korea-officials-will-hold-summit-in-april-reports-2018-03-06). That comes after North Korean leader Kim Jong Un met with a senior delegation from the South in Pyongyang and said he wanted to "write a new history of national reunification" for the two countries.

The reports said North Korea will suspend weapons testing during the summit and would be open to talks with the U.S. about scrapping nuclear weapons and normalize ties.

Building on gains from Monday, and higher European and Asian markets, investors had been seen as ready to continue picking up bargains and to wade into assets perceived as riskier, such as stocks. That's after equities logged hefty losses last week as investors worried about the potential for a global trade war.

The risk-on mood was also helped by comments from Ryan, who warned about the potential fallout (http://www.marketwatch.com/story/trump-today-president-says-canada-mexico-steel-tariffs-will-only-come-off-under-fair-nafta-2018-03-05) if President Donald Trump's plan to impose tariffs on steel and aluminum imports went ahead -- part of a show of resistance by some Republicans to the plan.

In addition, Trump himself appeared to show some willingness to be flexible on trade tariffs with Canada and Mexico, if they agreed to a "fair" North American Free Trade Agreement.

Read:Here's what the 30 Dow industrials companies say about a potential trade war (http://www.marketwatch.com/story/heres-what-the-30-dow-industrials-companies-said-about-a-potential-trade-war-2018-03-02)

What are strategists saying?

"We've got these North Korea headlines giving us a bit of upside," said James Hughes, chief market analyst at AxiTrader. "It's been pretty slow today, with light trading flows and a light calendar. On each one of these days it doesn't take too much to give markets a shot in the arm."

"Investors may have been rattled by the prospect of a trade war after Donald Trump's recent tariffs announcement, but equity markets are once again recovering as it becomes clear that the US President does not have the full backing of his party of this one," said Craig Erlam, senior market analyst at OANDA, in a note to clients.

What's on the economic lineup?

A trio of Federal Reserve speakers may provide some food for thought. Kicking off, New York Fed President William Dudley is scheduled to give a speech on economic conditions and recovery efforts in the U.S. Virgin Islands in St. Thomas, Virgin Islands at 7:30 a.m. Eastern Time.

After the market close, Fed Governor Lael Brainard will speak on the economy and monetary policy at the Money Marketeers Forum in New York at 7 p.m. Eastern. Later, Dallas Fed President Rob Kaplan will take part in a moderated discussion at CERA Week, an annual energy conference, in Houston at 8:30 p.m. Eastern.

The data calendar is light, with factory orders for January due at 10 a.m. Eastern, as investors wait for the highlight of the week -- the February nonfarm payrolls report on Friday.

Read:Trump, trade wars, inflation: Wall Street on edge ahead of February jobs report (http://www.marketwatch.com/story/trump-trade-wars-inflation-wall-street-on-edge-ahead-of-february-jobs-report-2018-03-03)

What stocks could be active?

Target Corp.(TGT) slipped 1.5% after quarterly results. Dollar Tree Inc.(DLTR) earnings are still ahead, along with Brown-Forman Corp.(BFA) .

See:Target earnings preview -- 2018 performance should be a lot like Walmart's in 2017 (http://www.marketwatch.com/story/target-earnings-preview-the-retailers-2018-performance-should-be-a-lot-like-walmarts-in-2017-2018-03-05)

Those will be followed by reports from Costco Wholesale Corp.(COST) and Tronc Inc.(TRNC) after the close.

Read:Qualcomm meeting on hold, but Broadcom drama still heats up (http://www.marketwatch.com/story/qualcomm-meeting-on-hold-but-broadcom-drama-still-heats-up-2018-03-05)

What are other markets doing?

Along with stock futures, European stocks were trading firmly higher (http://www.marketwatch.com/story/european-stocks-march-higher-as-fears-of-trade-wars-abate-2018-03-06). Asian markets also jumped across the board (http://www.marketwatch.com/story/asian-markets-jump-back-to-life-after-days-of-declines-2018-03-05), led by a 2% rise for the Hong Kong Hang Seng Index .

Across other assets, the ICE Dollar Index slipped 0.4% to 89,771, while crude was up 0.5% to $62.91 a barrel and gold prices gained 0.6% to $1,327.90 an ounce.


(END) Dow Jones Newswires

March 06, 2018 07:03 ET (12:03 GMT)

Copyright (c) 2018 Dow Jones & Company, Inc.
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