Stocks opened sharply higher and tacked on gains throughout the morning. The market found a level by late morning and then went into drift mode, as it moved in a very narrow trading range the rest of the day. The strength was attributed to reports that the U.S. and China will restart trade negotiations after not speaking to each other for the past two months. The move was broad-based, but led by the Dow, which was helped by post-earnings advances for Walmart (WMT) and Cisco (CSCO). ECONOMIC EVENTS: In the U.S., initial jobless claims fell 2,000 to 212,000 in the week ended August 11. The Philly Fed manufacturing index dropped 13.8 points to 11.9 in August, which was much weaker than forecast. Housing starts rebounded a tepid 0.9% to a 1.168M rate in July, which was below forecast. Building permits bounced 1.5% to a rate of 1.311M. COMPANY NEWS: Shares of Walmart jumped over 9% after the retailer reported better than expected earnings and revenue for the second quarter and raised its full-year profit forecast. Walmart, which continues to fight Amazon (AMZN) on both the online and physical retail fronts, reported Q2 U.S. same-store sales growth of 4.5% and U.S. e-commerce sales growth of 40%… On the other side of the retail spectrum is J.C. Penney (JCP), which dropped 27% after the company’s Q2 losses were steeper than expected and it reduced its outlook for the fiscal year… Cisco shares rose 3% after the company posted a Q4 beat and guided for year-over-year revenue growth of 5%-7% that was better than expected… Meanwhile, Teva (TEVA) shares rallied 7% in New York after the FDA approved the company’s generic version of Mylan’s (MYL) EpiPen and EpiPen Jr auto-injector. Mylan shares closed fractionally higher after the news. MAJOR MOVERS: Among the noteworthy gainers was Symantec (SYMC), which gained 5% after it was confirmed that Starboard has taken a position in the company and nominated five directors to its 11-person board. Also higher was 58.com (WUBA), which rose 11% after reporting quarterly results. Among the notable losers were SpartanNash (SPTN) and Dillard’s (DDS), which fell 18% and 9%, respectively, after reporting quarterly results. INDEXES: The Dow rose 396.32, or 1.58%, to 25,558.73, the Nasdaq gained 32.41, or 0.42%, to 7,806.52, and the S&P 500 advanced 22.32, or 0.79%, to 2,840.69.
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