Stocks Open Higher; Dow Jones Set To Extend Rally| Investor’s Business Daily

Stocks powered higher Friday as strong manufacturing and consumer sentiment data, alongside easing China trade war and U.S. government shutdown tensions, buoyed markets.




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The Dow Jones industrial average raced ahead 0.8% at the open. The Nasdaq composite climbed 0.6% and the S&P 500 rolled 0.7% higher.

JPMorgan (JPM) and Walgreens (WBA) surged to the top of the Dow Jones industrials, up more than 2% apiece. Walgreens snatched the early lead among Nasdaq 100 stocks away from chipmaker Nvidia (NVDA).

Positive earnings sent IBD 50 stock SS&C Technologies (SSNC) surging toward a buy point. Nvidia jumped, despite mixed fourth-quarter results. Marijuana stock Canopy Growth (CGC) gained after its fiscal third-quarter earnings. Workday (WDAY) advanced on an analyst upgrade.

On the downside, Rubbermaid owner Newell Brands (NWL) and XPO Logistics (XPO) fell hard following their earnings reports. Heavy equipment maker Deere traded flat after reporting that China trade war tariffs chewed into its fiscal first-quarter results.

Nasdaq, Dow Jones Shoot For Eight

Both the Nasdaq composite and the Dow Jones Industrial Average are on track for their eighth-straight weekly gain. The Dow is up 1.3% for the week heading into Friday’s session. The Nasdaq has a 1.8% gain. The S&P 500 rose 1.4% for the week through Thursday. It is working on its seventh advance in the past eight weeks.

SS&C, Canopy Growth Near Buy Points

Arista Networks, Nvidia and SS&C Technologies all bolted higher following quarterly earnings reports. SS&C pared its early loss to 3%. That positioned the stock 5% below a 61.07 buy point in a six-month cup base.

Marijuana stock Canopy Growth popped 1.5% early, although its fiscal-third quarter results missed some estimates. The volatile stock ended Thursday 49% above its May IPO price, and about 13% below a 51.91 buy point in a very deep cup-with-handle base.

Marijuana peer Cronos Group (CRON) also gained 1.5%. Aurora Cannabis (ACB) dipped more than 1%.

Government Shutdown

A second federal government shutdown seemed all but averted early Friday. President Trump Thursday night reportedly will sign a $333 billion spending bill that had passed votes in the House and Senate on Thursday. The bill includes $1.38 billion for physical barriers at the U.S.-Mexico border.

The president had requested $5.7 billion for border protection, and the White House appeared set to declare a national emergency — a move that would allow the president to tap military construction or Army Corps of Engineers funds in order to build border barriers. The president is scheduled to speak on the border situation at 10 a.m. ET.

Deere Flat After Mixed Q1 Report

Deere shook off its premarket losses to trade a fraction higher just after the open. The agriculture and construction equipment maker reported late Thursday a 14% earnings per share gain — well below expectations for a 37% gain and its slowest performance in eight quarters.  Management said China trade war tariffs had driven up materials prices, while uncertainty over the trade dispute has made farmers reluctant to make large ticket equipment purchases.

Deere shares have formed a year-long saucer base.

Consumer Sentiment, NY Manufacturing Surge

New York region manufacturing picked up sharply in February, according to the New Yor Federal Reserve Bank’s Empire State Manufacturing Survey. The index jumped to a reading of 8.8 for the month, up from 3.9 in December and blowing past consensus views for the index to nearly doubel, to 7.6. Labor, new orders and shipments categories all gained, the report said. Raw materials costs decreased, while the index of prices received for goods jumped 10 points, to its highest level in months.

Consumer sentiment jumped more than expected in February. The University of Michigan reported its Consumer Sentiment Index soared to 95.5 for the month, up from 91.2 in December and outstripped forecasts for an increase to 93. The end of the federal government shutdown, and a shift by the Federal Reserve toward a less hawkish rate-hike stance were primary factors, the release said.

China Trade War

U.S. and China wrapped up China trade war negotiations on Friday. Negotiators on both sides agreed to continue talks in Washington next week, according to the Wall Street Journal. The target appears to be a memorandum of understanding, outlining the general concessions and rules of engagement going forward, including methods of enforcement. That could be used as a framework for a deal to be finalized by President Trump and Chinese President Xi Jinping. The two leaders are expected to schedule a summit meeting at a later date.

An MOU could provide a basis for President Trump to delay the increase of tariffs scheduled to take effect on March 2. Tariffs currently at 10% on China-made imports valued at $200 billion per year would increase to 25%. China has pledged it would respond in kind if such an increase were made.

Workday: Set To Launch New Product Cycle

Human resources software leader Workday trimmed a 3% to just a fraction. The stock received an early boost after Cowen & Co. upgraded shares to outperform, from market perform. The note also boosted the stock’s target price to 225, from 160. It cited a growing stable of new blue chip Cloud financial customers, and the probable launch of a a new product cycle.

Workday shares are up 9% since clearing a 172.77 cup base buy point in January.

Brexit News

The British Parliament voted down Prime Minister Theresa May’s second Brexit trade plan in a 303 to 258 vote on Thursday. The vote, the eighth defeat for a proposed Brexit plan, set the stage for the U.K. to leave the European Union with no formal trade plan in place.

Some see such a “hard Brexit” scenario as giving Britain added negotiating leverage vs. the EU. But a growing number of companies have warned a no-deal exit would force them to relocate operations. A German industry report on Thursday said one in eight German businesses operating in the U.K. planned to relocate over Brexit concerns. The date set for Britain’s exit is March 29.

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