U.S. stocks rose midday Monday, with the S&P 500 trading at a record, as investors looked ahead to another busy week of earnings and a Federal Reserve policy meeting that’s expected to deliver another cut to interest rates.
What are major indexes doing?
The S&P 500 index SPX, +0.54% rose 16 points, or 0.5%, to 3,038, surpassing its previous intraday all-time high of 3,027.98 set on July 26 — the same day it logged its all-time closing high of 3,025.86.
The Dow was trading about 1% below its record close, set on July 15, while the Nasdaq was just a few points shy of its record close, set July 26.
What’s driving the market?
Investors are laser-focused on corporate earnings reports, with 162 S&P 500 companies due to release quarterly financial results this week.
The market was pleased with earnings from one of the bigger names in the index, AT&T Inc. T, +4.07%, shares of which rose 4.3% Monday after the media-and-communications giant topped third-quarter profit expectations and revealed a plan to grow earnings-per-share by at least 33% by 2020.
Expectations around U.S.-China trade talks remain a positive force for the market, analysts said. The U.S. Trade Representative’s office on Friday released a statement that said U.S. Trade Rep. Robert Lighthizer and Treasury Secretary Steven Mnuchin spoke with Chinese Vice Premier Liu He on Friday and were close to completing some sections of an agreement with Chinese negotiators.
Optimism around trade helped lift Asian and European equity markets early Monday, said David Madden, market analyst at CMC Markets, in a note.
Investors have also reacted positively to earnings season. Through Friday, 40% of companies in the S&P 500 had reported third-quarter results, with the percentage topping estimates — 80% — running above the five-year average, according to FactSet. However, in aggregate companies reported earnings 3.8% above estimates, which is below the five-year average.
“Binary earning surprises continue to favor the bulls so far this season,” said Jeff deGraaf, chairman of Renaissance Macro Research, in a note. “Maybe the bar was lowered, thus spotting the earning season a few field goals, but better or worse is more important in this business than good or bad.”
Meanwhile, with the market on the verge of a new high, the broad S&P 1500 index doesn’t look dangerously overbought, he said.
The Federal Reserve is widely expected to deliver another quarter-point cut to its benchmark interest rate when policy makers conclude a two-day meeting on Wednesday.
Investors also continue to watch developments around Britain’s efforts to complete a deal dictating the terms of its exit from the European Union. The EU on Monday agreed to delay Brexit until Jan. 31 — OK’ing the postponement just three days ahead of the previously scheduled Oct. 31 departure date.
Meanwhile, U.K. lawmakers were expected to vote later Monday on whether to hold an early election in an effort to break parliamentary deadlock over Brexit. U.K. Prime Minister Boris Johnson is seeking a Dec. 12 election, but faces an uphill battle in Parliament.
In economic data, the U.S. trade deficit in September came in at $70.4 billion, below the $73.7 billion expected by economists polled by MarketWatch, and below the August level of $72.8 billion.
The Chicago Fed National Activity Index fell to -0.45 in September from 0.15 In August, suggesting below-trend economic growth in the U.S.
What companies are in focus?
Shares of Tiffany & Co. TIF, +31.02% rallied nearly 32%, after the luxury jeweler confirmed reports that it had received an unsolicited acquisition proposal from LVMH Moët Hennessy Louis Vuitton SE for $120 per share in cash, a roughly 32% premium to Friday’s closing price.
Restaurant Brands International Inc. QSR, -3.31%, the operator of the Burger King, Tim Hortons and Popeye’s fast-food chains, reported earnings that matched the consensus forecast, while revenue came in just below. The company’s stock fell 3.5%.
Spotify Technology SA SPOT, +13.95% shares were up 14.8% after the music-streaming service reported an unexpected profit in the third quarter, while surpassing analyst estimates for monthly active users.
Athene Holding Ltd. ATH, +5.71% announced Monday that it has reached an agreement with Apollo Global Management Inc. that would give Apollo an 18% stake in a deal valued at about $1.55 billion, or $46.20 a share — a 10% premium over Friday’s closing price. Shares in the retirement services company rose 5.5%.
How are other markets trading?
In commodities markets, the price of West Texas Intermediate crude oil for December delivery CLZ19, -1.25% fell about 1.5% to $55.84 per barrel on the New York Mercantile Exchange, and the price of an ounce of gold GCZ19, -0.64% fell 0.8% to $1,493.40 on Comex. The U.S. dollar DXY, -0.07%, meanwhile, ticked 0.1% lower relative to a basket of its major trading partners.
In Asia overnight, stocks closed higher, with the China CSI 300 000300, +0.76% adding 0.8%, Hong Kong’s Hang Seng Index HSI, +0.84% rising 0.8% and Japan’s Nikkei 225 NIK, +0.30% advancing 0.3%. In Europe, stocks were mostly higher, with the Stoxx Europe SXXP, +0.25% closing up 0.3%.