U.S. stocks ended in positive territory Monday after a volatile session saw the Dow swing by more than 600 points.
The S&P 500 (^GSPC) rose 0.18%, or 4.64 points, as of market close, with the tech sector outperforming. At the lows of the session, the S&P 500 fell to 2,583.23 points, the lowest level in more than eight months.
The Dow (^DJI) increased 0.14%, or 34.31 points, after shedding more than 500 points to fall to as low as 23,881.37 points earlier in the session. The Nasdaq (^IXIC) rose 0.74%, or 51.27 points.
“Recent volatility may have provided one of the most important components of a stock market bottom: fear. We have seen elevated hedging activity, increased trading volume, and extremely negative breadth (few stocks gaining),” John Lynch, chief investment strategist for LPL Financial Research, said in a note. “We see these signs of fear—as the S&P 500 remained above 2018 lows—as bullish. Keep in mind that retesting prior lows, though painful, is an important part of the bottoming process.”
Each of the three major indices declined by about 5% by the end of last week. Equities took a sharp turn lower last week after news broke that Meng Wanzhou, CFO of Chinese tech giant Huawei Technologies, was arrested in Canada and faces extradition to the U.S for allegedly breaching U.S. sanctions on Iran. China on Sunday summoned the U.S. ambassador to Beijing to protest Meng’s detention. The arrest of Meng, an executive of the second-largest smartphone vendor in the world, is viewed as a potential roadblock to the U.S. and China reaching a permanent trade deal.
Other trade-related headlines also rippled through the weekend. White House trade adviser and prominent China hawk Peter Navarro shrugged off tariff concerns as being a source of market volatility in comments during an interview with CNBC on Friday. U.S. Trade Representative Robert Lighthizer said on Sunday that he considers March 1 to be “a hard deadline” to come to a trade agreement with China before new tariffs could then be imposed.
The mixed bag for U.S. equities trailed a downward trend on Monday among global stocks, which have been weighed down in part by weak recent data from major economies. China’s factory inflation and consumer price indices each slowed in November, and import growth decelerated to the slowest rate in more than two years. Japan’s gross domestic product fell to an annualized pace of a 2.5% contraction in the third quarter, the sharpest rate of decline in more than four years.
In Europe, British Prime Minister Theresa May postponed the final vote on her Brexit deal originally scheduled to take place on Tuesday. Earlier reports that the vote would be delayed sent the pound tumbling to its lowest level in 18 months. On Saturday, Amber Rudd, Work and Pensions minister and a close ally of British Prime Minister Theresa May, became the first cabinet minister to offer possible alternatives if parliament rejects May’s proposal to leave the European Union.
Oil prices lost steam after surging on Friday following a decision by OPEC+ to cut output by 1.2 million barrels per day in an attempt to help rebalance the oil market. Goldman Sachs wrote in a note that there “remains uncertainty” around the exact implementation of the cuts “given the lack of country allocation and the exemptions of Libya, Venezuela and Iran.” U.S. crude oil futures (CL=F) settled lower by 3.1% to $51 per barrel. Brent crude prices (BZ=F) fell 2.76% to settle at $59.97 per barrel.
STOCKS: GoPro to move some camera production out of China, Gilead names Roche executive as CEO
GoPro (GPRO) will move most of its U.S.-bound camera production out of China by summer 2019 in order to mitigate the impact of new tariffs, the company said in a statement Monday. International production, however, will remain in China. Nick Woodman, CEO of the action camera company, previously said he was seeking to move production out of China in order to circumvent potential levies. Shares of GoPro fell 1.01% to $4.92 each as of market close.
Qualcomm (QCOM) won a preliminary order banning the import and sale of Apple (AAPL) iPhone models in China found to have violated two of Qualcomm’s patents, the company said in a statement Monday. The preliminary order, coming from the Fuzhou Intermediate People’s Court in China, affects the iPhone 6S through the iPhone X models. Qualcomm first filed the case in China in late 2017. Apple said in a statement to CNBC on Monday that it has filed an appeal to overturn the ban and said the patents in question do not cover the latest operating system on all new iPhones. Shares of Qualcomm rose 2.23% to $57.24 each as of market close, while shares of Apple rose 0.66% to $169.60 each.
Google (GOOG, GOOGL) will speed up its previously announced plans to shut down Google+ services after the company said it discovered a bug making it possible for developers to access private information on about 52.5 million users. The company noted in a statement that no third party compromised the system, and Google has “no evidence that developers who inadvertently had this access for six days were aware of it or misused it in any way.” The announcement comes the day before Google CEO Sundar Pichai is scheduled to testify about Google’s user privacy policies when he testifies before a House committee.
Tivity Health (TVTY) is buying weight management products company Nutrisystem (NTRI) in a cash and stock deal valued at about $1.4 billion, according to a statement Monday. Nutrisystem shareholders will receive $38.75 per share in cash and 0.2141 Tivity shares for each share of Nutrisystem stock. Shares of Nutrisystem surged 27.72% to $43.68 each as of market close, while shares of Tivity slumped 31.91% to $27.65 each.
Facebook (FB) increased its stock buyback program by $9 billion, according to a Securities and Exchange Commission filing on Friday. This comes on top of a previously authorized $15 billion buyback program and amid a series of scandals and weaker usage of the company’s core platform in North America. Shares of Facebook rose 3.22% to $141.85 each as of market close.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., December 7, 2018. REUTERS/Brendan McDermid
Biotech company Gilead Sciences (GILD) named Daniel O’Day, head of Roche Holding’s (ROG.VX) pharmaceuticals group, as CEO on Monday. The appointment brings a longtime pharmacy industry veteran to head Gilead, a company struggling with drug sales due to declining patient demand and pricing pressure. Gilead has been looking to tap a new CEO after John Milligan stepped down in July. Shares of Gilead turned around and fell 0.97% to $67.49 each as of market close.
ECONOMY: Job openings register roughly in-line with estimates in October
U.S. job openings rose to 7.079 million in October on a seasonally adjusted basis from a downwardly revised 6.96 million openings in September, according to a report Monday from the U.S. Bureau of Labor Statistics. This was roughly in-line with consensus estimates of 7.1 million openings, according to Bloomberg data. Job openings in October increased in information, real estate and education sectors and decreased in state and local government, transportation, warehousing and utilities, the BLS reported.