Market Snapshot: Stocks edge higher, S&P 500 Nasdaq look to set 10th record close of November

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U.S. stocks rose modestly Tuesday morning, with the major benchmarks looking to add to the record-setting levels reached Monday, with investors focused on U.S.-China trade talks and an upbeat assessment of the economy from Federal Reserve Chairman Jerome Powell.

What are major indexes doing?

The Dow Jones Industrial Average DJIA, +0.08% rose 24 points, or 0.1% to 28,089, while the S&P 500 index SPX, +0.08%  rose 3 points, or 0.1% to 3,136. The Nasdaq Composite Index  COMP, +0.17% gained 13 points, or 0.2% to trade at 8,645 Volume was expected to be subdued ahead of Thursday’s Thanksgiving Day holiday, which will see U.S. markets closed, followed by an abbreviated trading session on Friday.

All three major benchmarks were trading above their previous intraday and closing records, all which were set Monday. Yesterday’s action marked the ninth record close of the month for the S&P 500 and the Nasdaq — the most since January 2018.

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What’s driving the market?

Top Chinese and U.S. negotiators agreed on talks toward a preliminary “phase one” deal, China’s Commerce Ministry said Tuesday. The ministry said Vice Premier Liu He, the country’s top negotiator, spoke by phone with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin — a conversation the official Xinhua News Agency described as focused on “solving issues regarding each other’s core concerns…”

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Stocks have been sensitive to developments in the long-running U.S.-China trade battle and have been largely in rally mode since October, returning to all-time highs, after Washington and Beijing signaled they were working toward a partial deal aimed at resolving less controversial issues. Still ahead is an important Dec. 15 deadline, when a new round of U.S. tariffs on Chinese imports are due to take effect.

“With global central banks pumping liquidity into the system and investors have a sense that a trade deal is coming that could create more upside,” said director of U.S. institutional equities at INTL FCStone told MarketWatch. “The market is telling us that the status quo is fine — we can live with no deal in 2019 as long as we don’t see any new tariffs and the rhetoric stays on the friendly side.”

Abbasi also said that equity markets upward trajectory could be sustained by calendar effects, during a holiday week and heading into the final month of the year. “As you start to get to the period of light volumes and lighter news flow, what tends to happen is that as long as systematically markets are working, they’ll keep up the trend they’ve been on.”

Powell, in remarks Monday evening, outlined an optimistic view of the U.S. economy but signaled that low inflation would likely keep interest rates low. The Fed chief said that the central bank’s three rate cuts this year have helped to spur home purchases, contributing to the economy’s longest expansion on record. Powell last month signaled that the Fed was likely to leave rates on hold barring a significant deterioration of the economic outlook.

The economic calendar on Tuesday features U.S. October data on advance trade in goods, which showed the trade deficit fell 6% to $66.5 billion, versus expectations of $70.3 billion, according to a MarketWatch poll of economists, but the U.S. is still likely to post the biggest trade deficit in 2019 in 11 years.

Consumer confidence fell in November for the fourth month in a row, with the Conference Board’s index falling from 125.5 from 126.1 in October, below economists expectations of a 128.2 reading, according to a MarketWatch poll.

The Case-Shiller home-price index for September showed home prices rising nationally at a 3.2% annual pace, up from a 3.1% rise in August. New home sales fell in October to a seasonally adjusted annual rate of 733,000, from 738,000 in September.

Federal Reserve Board Gov. Lael Brainard is scheduled to speak at 1 p.m. Eastern.

What stocks are in focus?

Shares of Hewlett Packard Enterprise Co. HPE, -8.68%  were in focus after the computing giant late Monday reported fourth-quarter revenue that fell short of Wall Street forecasts. Shares fell 7.9% early Tuesday.

Shares of Best Buy Co. Inc. BBY, +8.59%  rose 5% after the electronics retailer reported better-than-expected third-quarter sales and profits and raising its guidance for full-year, same-store-sales growth.

The Wall Street Journal reported Monday that activist investor Starboard Value LP took a stake in CVS Health Corp. CVS, -0.93%  and held talk with the drugstore-and-insurance company’s management, according to people familiar with the matter. CVS shares fell 0.7% early Tuesday.

Palo Alto Networks Inc. PANW, -11.38%  stock tumbled 10.6% after the security-software company reported fiscal second-quarter earnings Monday evening that missed expectations on adjusted earnings and said it would acquire the firm Aporeto for $150 million in cash.

Shares of Burlington Stores Inc. BURL, +9.38%  were up 8.7% after reporting a stronger-than-expected rise in third-quarter same-store sales and earnings and revenues that topped estimates.

Shares of Chinese e-commerce giant Alibaba BABA, -0.24% jumped in their debut on the Hong Kong stock exchange on Tuesday, an upbeat launch amid unrest in the former British colony.

How are other markets trading?

The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -1.27%  fell 2.1 basis points to 1.738% as investors look toward a government bond auction at 1 p.m. Eastern Time.

In commodities markets, oil looked to extend Monday’s gains, with West Texas Intermediate Crude for January delivery CLF20, +0.33%  rising 32 cents, or 0.6%, to $58.31 per barrel. Gold prices were under modest pressure, with gold for December delivery GCZ19, +0.10%  falling 10 cents, or less than 0.1% to $1456.60 an ounce.

In Asia overnight, stocks closed mostly higher, with the China CSI 300 000300, +0.35%  gaining 0.4% and Japan’s Nikkei 225 NIK, +0.35%  adding 0.4%. Hong Kong’s Hang Seng Index HSI, -0.29%, meanwhile fell 0.4%.

In Europe, stocks were trading mixed, with the Stoxx Europe 600 SXXP, +0.18%  up 0.2%.

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