Stocks were sharply higher in early trading following a report that trade talks have begun between the U.S. and China. Adding to the improved sentiment were reports claiming that China plans to roll back harsh tariffs imposed on U.S.-made vehicle imports. The major averages wobbled after President Trump and Democratic leaders had a heated conversation during a meeting in front of the press. During the exchange, Trump said he would shut down the U.S. government if Congress doesn’t fund his proposed border wall. The averages regained their footing, however, and finished mixed and not far from where they began the day.
ECONOMIC EVENTS: In the U.S., the Producer Prices Index rose 0.1% month-over-month in November, with the core component excluding food and energy 0.3% higher, both of which were slightly hotter than forecast. In White House news, U.S. President Donald Trump said with the press present when meeting with Democrats Nancy Pelosi and Chuck Schumer that he would be proud to shut down the U.S. government if his demands for border funding are not met.
COMPANY NEWS: Verizon (VZ) announced that the cost of its employee buyout plan, which will reduce its headcount by 10,400 through June 2019, will range between $1.8B-$2.1B and will be recorded in the fourth quarter. In addition, the company expects to record a non-cash goodwill impairment charge of approximately $4.6B, or $4.5B after-tax, in the fourth quarter of 2018 to account for Oath's "loss of market positioning to [its] competitors in the digital advertising business," Verizon stated.
Meanwhile, rival AT&T (T) was also in focus after Citi analyst Michael Rollins upgraded the stock to Buy as he expects the company to further benefit from the "measured" promotional environment in wireless, while improving its competitive position from FirstNet and the marketing of its network enhancements.
Auto stocks were on the rise following a report that said China is moving toward cutting its tariffs on U.S.-made cars, a move President Donald Trump already boasted about as a concession won during trade discussions in Argentina. The Wall Street Journal reported near noon that China's top point person on trade talks, Vice Premier Liu He, informed Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer in a phone call last night that China will cut the U.S. auto tariff to 15%. General Motors (GM) shares rose about 1%, while Ford (F) shares gained fractionally after the news.
Dell Technologies announced that it has received stockholder approval for the previously announced Class V (DVMT) transaction, which is expected to close on December 28, 2018, subject to satisfaction of closing conditions. Dell Technologies Class C shares are expected to begin trading on the New York Stock Exchange with the ticker "DELL" on the same day, the company noted.
Meanwhile, Cisco (CSCO) shares were 0.5% higher after Bloomberg reported that the company is in talks to acquire optical chip maker Luxtera.
MAJOR MOVERS: Among the noteworthy gainers were Ascena Retail (ASNA) and DSW (DSW), which gained a respective 7% and 8% after reporting quarterly results.
Among the notable losers was Nvidia (NVDA), which slid about 2.5% after Bloomberg reported that SoftBank (SFTBF) is considering the sale of its stake in the chipmaker early next year. Also lower was Stitch Fix (SFIX), which plunged 21% after reporting quarterly results.
INDEXES: The Dow dipped 53.02, or 0.22%, to 24,370.24 , the Nasdaq gained 11.31, or 0.16%, to 7,031.83 , and the S&P 500 advanced 0.94, or 0.04%, to 2,636.78.
