U.S. officials are reportedly preparing a deal that could be signed within a month, according to news agency Bloomberg. The trade war between the world’s largest economies has raised prices for consumers and companies. It’s also deepened concerns that escalating tariffs could worsen the global economy’s slowdown.
President Donald Trump held off on a threat to impose higher tariffs on $200 billion of Chinese products as negotiations continued. Washington accuses Beijing of stealing foreign companies’ technology or pressuring them to hand it over.
Stocks pulled back from an initial early-morning jump after a report showed manufacturing growth slowed in February. Investors have remained confident in the strength of the U.S. economy despite weak economic reports. Consumer spending in December took its biggest tumble in nine years. Disappointing retail sales are another sign that growth slowed at the end of 2018.
Health care, technology and financial stocks accounted for much of the market’s gains in early afternoon trading. Retailers also rose. Gap surged after saying it plans to spin off its Old Navy brand. Foot Locker rose after reporting strong financial results and a solid forecast. Tesla fell after CEO Elon Musk warned that the electric car maker is unlikely to see a profit in the first quarter.
KEEPING SCORE: The Dow Jones Industrial Average rose 68 points, or 0.3 percent, to 25,984 as of 1:07 p.m. Eastern time. The benchmark S&P 500 index, which is on track for its fifth straight weekly gain, rose 0.4 percent. The Nasdaq composite climbed 0.5 percent. Major indexes in Europe also marched higher.
OLD NAVY SAILING AWAY: Gap surged 18.5 percent after it told investors it will spin off its Old Navy brand into a separate company. The retailer will retain its namesake brand, along with Banana Republic and others, in a new, yet to be named company.
The split comes as Old Navy has thrived while Gap struggles with increasing competition from the likes of Target and Amazon.
RUNNING START: Foot Locker climbed 5.8 percent after the footwear and athletic apparel retailer blew past investor expectations for the fourth quarter. The company also forecast double-digit profit growth in 2019.
The company’s same-store sales, which measures growth at existing stores, hit 9.7 percent, more than doubling what Wall Street expected.
WEAK CHARGE: Tesla tumbled 8.1 percent after CEO Elon Musk said the electric car maker is unlikely to turn a profit in the first quarter. The company also began selling a $35,000 version of its Model 3. The car previously cost at least $42,900.
Tesla is cutting costs by shifting to online sales of its vehicles. It will close most stores but leave some open as galleries or “information centers” in high-traffic areas.
“This is the only way to achieve the savings for this car and be financially sustainable,” Musk told reporters during a conference call. “It is excruciatingly difficult to make this car for $35,000 and be financially sustainable.”
ROLLING THE DICE: Caesars Entertainment gained 3.3 percent after the casino operator said it will replace three board members with directors chosen by billionaire activist investor Carl Icahn.