Stocks - Wall Street Ends Mixed as Trade Uncertainty Weighs

11/02/2019 20:48:00 Stock Market – Wall Street ended Monday mixed as uncertainty on a U.S.-China trade deal and concerns a second government shutdown looms weighed on sentiment.

The Dow Jones Industrial Average fell 0.21%, the S&P 500 rose 0.06%, while the Nasdaq Composite added 0.13%.

A second round of trade talks between the U.S. and China got underway Monday, but investors remain uncertain if the two nations would be able to reach a consensus on trade before the current trade war truce ends on March 1.

If the both nations fail to reach a deal by March 1, President Donald Trump has threatened to raise tariffs on Chinese imports to 25% from 10%, risking a potential escalation in the trade dispute, which will likely hurt investor sentiment on stocks.

Still, the trade-sensitive industrial sector ended the day higher, helped by solid gains in Norfolk Southern (NYSE:NSC) after the railroad company outlined a plan to increase revenue and growth.

In Washington, meanwhile, U.S. lawmakers showed little sign of averting a second government shutdown in less than two months after they failed to reach an agreement on Sunday over immigrant detention policy ahead of President Trump's Feb. 15 deadline.

On the earnings front, Restaurant Brands International (NYSE:QSR) closed 1.7% higher after reporting above-consensus fourth-quarter earnings and in-line revenue. The company operates through the Tim Horton's coffee, Burger King and the Popeyes Louisiana Kitchen chains.

The beat on the bottom line was driven by comparable sales strength at Tim Hortons and Popeyes, though slowing comparables at Burger King held back gains.

A rise in the energy sector limited downside in the broader market even as U.S. oil prices fell 0.6% as concerns that an escalation in the U.S.-China war may hurt oil demand, pressuring oil prices.

The communications services sector was led lower by a plunge in Activision Blizzard (NASDAQ:ATVI).

Activision Blizzard reportedly is planning to announce significant job cuts when it releases earnings on Tuesday, Bloomberg reported, citing people familiar with the matter. Its shares fell 7.6%.

Other game publishers, including Take-Two Interactive Software (NASDAQ:TTWO) and Electronic Arts (NASDAQ:EA) also ended the day lower.

In other corporate news, Tesla (NASDAQ:TSLA) rose 2.5% after Canaccord Genuity upgraded its rating to buy from hold and hiked its price target on the stock to $450 a share from $330.

The bullish upgrade from Canaccord on Tesla comes as others on Wall Street turn their attention to the launch of company's Model 3 vehicle in Europe.

"The profitability picture for 2019 and the all-important Model 3 demand trajectory in Europe for Tesla looks encouraging for Musk & Co., but there is clearly heavy lifting ahead around Europe logistics/cost-cutting/driving incremental US demand that will remain overhangs and thus make Tesla a 'prove me' story the next few quarters," Wedbush said.

Top S&P 500 Gainers and Losers Today:

ABIOMED (NASDAQ:ABMD), Newell Brands (NASDAQ:NWL) and Coty (NYSE:COTY) were among the top S&P 500 gainers for the session.

Covetrus Inc, Activision Blizzard (NASDAQ:ATVI) and Loews (NYSE:L) were among the worst S&P 500 performers of the session.