3-6-18 10:23 AM EST | Email Article

By Barbara Kollmeyer, MarketWatch , Ryan Vlastelica

Target falls after results

U.S. stocks swung between gains and losses early Tuesday as headlines from talks between North and South Korea, reportedly including plans for the first summit in a decade, pointed to an easing of one of the market's biggest geopolitical uncertainties.

While North Korea hasn't been a primary market mover for months, it has repeatedly been cited as one of the market's potential risks of 2018. The news comes at a time of heightened geopolitical drama, with investors continuing to digest the prospect of a trade war, especially after the Trump administration's trade war received opposition from key Republicans like House Speaker Paul Ryan.

What are the main benchmarks doing?

The Dow Jones Industrial Average rose slipped 9 points, or less than 0.1%, to 24,870. The S&P 500 rose 2 points, or 0.1%, to 2,723. The Nasdaq Composite Index was up 31 points to 7,361, a gain of 0.4%.

Equity benchmarks are attempting to extend a sharp rally in the previous session, when major indexes closed more than 1% higher in what some called 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?

Positive sentiment was boosted after South Korea's presidential office reportedly said the two Koreas would 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.

The risk-on mood was also helped by comments from Paul 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.

Stocks have recently been pressured by the prospect of more protectionist trade policies, a headwind that contributed to heavy losses in the major U.S. indexes last week.

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?

"It was hard to evaluate what negative impact the Korea situation was having on the market, if any, but the possibility of war risk in Asia was the biggest uncertainty out there, and which could help eliminate that. Even if the risk seemed remote, that's a net positive for the market," said George Schultze, a hedge-fund manager and founder of Schultze Asset Management.

"Meanwhile, it seems like investors are starting to suspect that Trump's tariff announcement could just be an opening gambit in his renegotiations over Nafta, so the threat may not be as bad as some are fearing."

What's on the economic lineup?

A group of Federal Reserve speakers will be watched by investors. Kicking off, Dallas Fed President Rob Kaplan said he still expects three interest-rate increases this year, and that he wants to get started soon. Recent volatility in the market has come as investors fret that inflation could be returning to the economy, and that the Fed could have to become more aggressive in combating such a scenario. However, most investors interpret a more aggressive stance as four rate increases this year.

After the market close, Fed Gov. Lael Brainard will speak on the economy and monetary policy at the Money Marketeers Forum in New York at 7 p.m. Eastern. Later, 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 3.9% despite reporting quarter revenue (http://www.marketwatch.com/story/targets-same-store-sales-beat-estimates-2018-03-06) that came in ahead of analyst expectations.

United Parcel Service Inc. (UPS) rose 1.6% after Stifel Nicolaus upgraded the stock (http://www.marketwatch.com/story/upss-stock-jumps-after-analyst-upgrade-on-valuation-dividend-yield-2018-03-06), citing its valuation and dividend yield.

Marinus Pharmaceuticals Inc.(MRNS) slumped 9.7% after it reported a 2017 loss that was wider than expected (http://www.marketwatch.com/story/marinus-pharma-shares-slide-14-premarket-after-company-posts-wider-than-expected-loss-2018-03-06).

CommerceHub Inc. (CHUBA) agreed to be bought by private-equity firm Sycamore Partners in a cash deal valued at $1.1 billion (http://www.marketwatch.com/story/commercehub-to-be-bought-out-by-sycamore-in-a-deal-valued-at-11-billion-2018-03-06). The stock spiked 23%.

Energy stocks were among the strongest of the day, with the sector up 0.6%. The industry was supposed by a 1.3% rise in the price of natural gas. Among the biggest gainers in the energy sector, Baker Hughes, a General Electric Co. (BHGE) rose 1.4% while Schlumberger Ltd. (SLB) was up 1.2%. Dow component Chevron Corp. (CVX) rose 1.2%.

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 10:23 ET (15:23 GMT)

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