US Stocks Edge Higher in Early Trading, Extending Gains
NEW YORK (AP) – U.S. stock indexes edged higher in early trading Wednesday, extending modest gains from a day earlier, as investors reviewed the latest batch of company earnings reports.
Gains in consumer goods, technology and communications companies outweighed losses in health care and financial stocks.
Garmin, maker of fitness trackers and navigation technology, rose after reporting better sales. CVS Health slumped after the pharmacy operator gave a 2019 outlook that fell short of Wall Street's expectations.
Roughly 81 percent of S&P 500 companies have reported results for the last three months of 2018, delivering earnings growth of 13.1 percent versus a year earlier, according to FactSet. First-quarter snapshots are expected to result in a 2.5 percent decline in earnings, however.
The latest round of company earnings showed solid profit growth for the final three months of 2018, but caution about conditions going forward amid signs of a weaker global economy this year. Europe and China have both reported slower growth.
Investors also had their eye on Washington for any hints of progress in the latest round of trade talks between the U.S. and China. Uncertainty over the costly trade dispute between the world's largest economies has clouded the outlook for company profits.
KEEPING SCORE: The Dow Jones Industrial Average rose 6 points, or less than 0.1 percent, to 25,897 as of 10:12 a.m. Eastern Time. The benchmark S&P 500 index, which has risen for the past three weeks, gained less than 0.1 percent, while the Nasdaq composite added 0.2 percent. Major European indexes were also higher.
TRADE TALKS: Negotiators for the U.S. and China resumed talks Tuesday following discussions in Beijing last week. U.S. officials said those talks made some progress on difficult issues such as China's blueprint for making its industries world leaders in advanced technologies such as robotics and artificial intelligence.
The Trump administration has raised tariffs on billions of dollars' worth of Chinese goods and the U.S. is due to increase them on March 2, following a 90-day truce to allow time for the negotiations now underway. President Donald Trump has indicated the deadline might be extended if progress is being made.
Vice Premier Liu He, China's economy czar, was due to arrive in Washington on Thursday, China's state media reported, after two days of preliminary talks by lower-level officials.
FEELING FIT: Shares in Garmin jumped 14.5 percent after reporting better sales.
SOLID QUARTER: Cadence Design Systems climbed 5.1 percent after the software and engineering services company's latest quarterly results topped Wall Street's forecasts.
UNDER THE WEATHER: CVS Health slumped 8.6 percent after the pharmacy operator beat fourth-quarter earnings forecasts. The company also issued a 2019 outlook that fell short of analysts' estimates.
CEO Larry Merlo said in a prepared statement that 2019 would be "a year of transition" as the company integrates the health insurer Aetna, which it purchased in a roughly $69 billion deal last year. A federal judge is still evaluating the acquisition.
ENERGY: U.S. benchmark crude fell 0.1 percent to $56.05 a barrel in New York. Brent crude, the standard for international oil prices, dropped 0.2 percent to $66.30 a barrel in London.
By AP reporter Alex Veiga