By Sue Chang, MarketWatch , Ryan Vlastelica
ECB leaves rates unchanged
The Nasdaq attempted to rise for a fifth day in a row Thursday even as the broader market struggled to gain a foothold in positive territory due to ongoing uncertainties over President Donald Trump's threats to impose tariffs on trading partners and key allies.
Trump is scheduled to sign a decree that lays out his plan for levies on steel and aluminum imports at 3:30 p.m. Eastern time on Thursday. The president said earlier that tariffs could go "up or down" depending on the country. The prospect of tariffs has spurred volatility in recent sessions although there are reports that indicate that major trading partners Canada and Mexico (http://www.marketwatch.com/story/white-house-suggests-canada-mexico-and-other-countries-can-avoid-tariffs-2018-03-07) may be spared, which could limit the potential for any retaliation.
And see: China promises 'justified and necessary response' if trade war breaks out (http://www.marketwatch.com/story/china-promises-justified-and-necessary-response-if-trade-war-breaks-out-2018-03-08)
What are the main benchmarks doing?
The Dow Jones Industrial Average edged up 20 points to 24,821. The S&P 500 index rose 6 points, or 0.2%, to 2,733. The Nasdaq Composite Index rose 23 points, or 0.3%, to 7,418.
All three indexes dipped into negative territory earlier although the S&P 500 and the Nasdaq bounced back. The three gauges stand below all-time highs set in late January, but they've also rallied from lows reached in early February, when investors were increasingly nervous about an uptick in inflation and rising interest rates.
What's driving markets?
Issues surrounding trade have driven market action in both directions over the past week. Investors are concerned that an escalation of protectionism, or retaliation by trading partners, could threaten U.S. economic growth. For example, the European Union has lined up retaliatory action (http://www.marketwatch.com/story/eu-lines-up-its-salvos-to-fight-trump-tariffs-2018-03-08) if the Trump administration imposes levies on its products.
In an interview on Bloomberg TV, J.P. Morgan(JPM) boss Jamie Dimon said tariffs were "the wrong way" (http://www.marketwatch.com/story/jamie-dimon-says-trumps-tariff-plan-is-the-wrong-way-to-tackle-trade-problems-2018-03-08) to go about tackling trade problems.
Trade fears have weighed on markets this month, and the late Tuesday resignation of pro-trade White House adviser Gary Cohn added to the uncertainty. The Dow has fallen 0.8% so far in March, while the Russell 2000 , an index of small-capitalization stocks that is seen as having less exposure to this issue (http://www.marketwatch.com/story/worried-about-a-trade-war-stock-market-investors-should-think-small-2018-03-02), is up 3.7% over the same period.
Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
However, there are a number of positive factors that continue to support equities outside of the trade issue, including growing corporate profits and improving economic data. In the latest economic data, jobless claims rose by 21,000 in the latest week (http://www.marketwatch.com/story/jobless-claims-jump-21000-to-231000-a-week-after-setting-nearly-50-year-low-2018-03-08), rebounding off their lowest level since 1969.
No Federal Reserve officials were scheduled to speak Thursday. The European Central Bank left interest rates unchanged but removed language from its statement saying it would boost the size of its asset purchases if conditions deteriorated. The move was widely described as a small step toward ending the ECB's quantitative easing program later this year.
See:ECB's Mario Draghi: 'If you put tariffs against your allies, one wonders who the enemies are' (http://www.marketwatch.com/story/ecbs-mario-draghi-if-you-put-tariffs-against-your-allies-one-wonders-who-the-enemies-are-2018-03-08)
(http://www.marketwatch.com/story/ecbs-mario-draghi-if-you-put-tariffs-against-your-allies-one-wonders-who-the-enemies-are-2018-03-08)Read:5 takeaways from the ECB's tiny step toward a QE exit (http://www.marketwatch.com/story/5-takeaways-from-the-ecbs-tiny-step-toward-a-qe-exit-2018-03-08)
What are strategists saying?
"The tariffs are driving volatility in the short term, but it seems like it is more about politics than a fundamental policy change, given the reports that Mexico and Canada could be exempt. We think the likelihood of a full trade war are low, and that any market dips are a buying opportunity," said Abe Sheikh, co-chief investment officer of Cougar Global. Cougar is an affiliate of Carillon Tower Advisors, which has $65 billion in assets.
"Valuations are on the high end, though they're somewhat justified by earnings growth. However, we're especially careful about investing in markets that have bigger downside risk."
What are other assets doing?
European stocks (http://www.marketwatch.com/story/european-stocks-rise-for-4th-day-in-a-row-as-ecb-steals-focus-from-us-tariffs-2018-03-08) gained across the board and Asian markets closed higher (http://www.marketwatch.com/story/asian-markets-recover-though-worries-remain-post-cohn-2018-03-07).
Check out:Here's the case for a hawkish tweak to the ECB's policy guidance (http://www.marketwatch.com/story/heres-the-case-for-an-unexpected-tweak-to-the-ecbs-policy-guidance-2018-03-07)
Gold futures (http://www.marketwatch.com/story/gold-slips-into-the-red-for-second-day-2018-03-08) and oil futures (http://www.marketwatch.com/story/oil-prices-steady-after-us-output-climb-helps-drive-plunge-2018-03-08) lost ground as the ICE U.S. Dollar Index rose 0.6% (http://www.marketwatch.com/story/euro-falls-back-as-traders-watch-for-ecbs-qe-hints-2018-03-08). The yield on the 10-year U.S. Treasurys (http://www.marketwatch.com/story/treasury-yields-turn-lower-after-ecb-drops-easing-bias-2018-03-08) fell 3 basis points to 2.86%.
Which stocks look like key movers?
Shares in Express Scripts Holding Co.(ESRX) jumped 7.9% after health insurer Cigna Corp.(CI) said it plans to buy the pharmacy-benefits manager in a $67 billion deal (http://www.marketwatch.com/story/cigna-to-buy-express-scripts-for-67-billion-2018-03-08). Cigna's stock fell 11%.
Supermarket operator Kroger Co.(KR) sank 12% after it reported its fourth-quarter results (http://www.marketwatch.com/story/krogers-stock-tumbles-after-profit-same-store-sales-match-expectations-2018-03-08).
Rent-A-Center Inc.(RCII) rose 10% a day after it announced layoffs and said it was reviewing "strategic and financial alternatives (http://www.marketwatch.com/story/rent-a-center-announces-layoffs-says-board-reviewing-alternatives-2018-03-07)" to maximize stockholder value, including evaluating the sale of the company.
American Eagle Outfitters Inc.(AEO) tumbled 11% despite reporting strong-than-expected revenue and raised its dividend (http://www.marketwatch.com/story/american-eagles-stock-surges-after-sales-beat-upbeat-outlook-and-raised-dividend-2018-03-08).
Shares in Costco Wholesale Corp.(COST) fell 1.9% a day after it posted better-than-expected revenue (http://www.marketwatch.com/story/costco-shares-wobbly-after-revenue-tops-street-view-2018-03-07) along with earnings that were boosted by the U.S. tax overhaul
Newspaper publisher Tronc Inc.(TRNC) reported earnings that missed forecasts (http://www.marketwatch.com/story/tronc-stock-flat-after-earnings-miss-2018-03-07), sending shares tumbling 24%.
Shares of Caesars Entertainment Corp.(CZR) rose 3.2% after the casino operator said it swung to a quarterly profit (http://www.marketwatch.com/story/caesars-shares-higher-after-casino-company-swings-to-profit-2018-03-07).
--Victor Reklaitis contributed to this report
(END) Dow Jones Newswires
March 08, 2018 15:08 ET (20:08 GMT)