Stocks have been rising in morning trading following some positive economic data and after the Wall Street Journal reported that a delegation of U.S. officials could travel to Beijing during the final week of May to resume trade talks. However, the Commerce Department also added Huawei to a list that could allow the U.S. to ban the sale of American technology to the Chinese firm in what would be a dramatic escalation of the trade fight. The Huawei threat, while sinking a broad swath of semiconductor makers, is being shaken off by the broader market as stocks continue to recover from their recent trade-fear fueled weakness.
ECONOMIC EVENTS: In the U.S., initial jobless claims fell 16,000 to 212,000 in the week ended May 11. Housing starts rebounded 5.7% to a 1.235M rate in April, which was better than forecast. The Philly Fed manufacturing index rose 8.1 points to 16.6 in May, beating estimates.
TOP NEWS: President Trump signed an executive order that would effectively bar Huawei from selling telecom equipment in the U.S., which was widely expected. However, in a more unexpected move, the Commerce Department is also adding Huawei to a list of entities engaged in activities contrary to U.S. interests, which could restrict the sale of U.S. technology to the Chinese company and signals another front opened in the ongoing trade fight being waged by the two superpowers. Inphi (IPHI), Qorvo (QRVO), nLight (LASR), IPG Photonics (IPGP), Skyworks (SWKS) Xilinx (XLNX) and Micron (MU) are among the semiconductor stocks that are weak today on the heels of the Huawei news.
Walmart (WMT) shares are up 3% after the retailer reported better than expected quarterly profits, with CEO Doug McMillon stating that he was "especially pleased" with the combination of comparable sales growth from stores and e-commerce in the U.S. In an interview after the report, CFO Brett Biggs said that he expects increased tariffs will mean some higher prices for customers. Bloomberg quoted Biggs as having said the company "will do everything we can to keep prices low, but increased tariffs lead to increased prices."
MAJOR MOVERS: Among the noteworthy gainers was Iovance (IOVA), which rose 33% after previewing its TIL therapy clinical program ahead of the upcoming American Society of Clinical Oncology annual meeting. Also higher was Cisco (CSCO), which gained 7% after reporting quarterly results and issuing guidance that Deutsche Bank analyst Vijay Bhagavath called "clearly better than feared."
Among the notable losers was Evolus (EOLS), which slid 13% after Alphaeon disclosed a sale of 4M shares of its common stock. Also lower were Virtusa (VRTU) and Dillard's (DDS), which fell 18% and 9%, respectively, after reporting quarterly results.
INDEXES: Near midday, the Dow was up 280.68, or 1.09%, to 25,928.70, the Nasdaq was up 117.30, or 1.50%, to 7,939.45, and the S&P 500 was up 37.53, or 1.32%, to 2,888.49.
