By Chris Matthews and Barbara Kollmeyer, MarketWatch

Tesla, Netflix, American Express shares in focus

U.S. stocks rose Friday morning, pointing to the potential for a fourth straight win for equities, as investors hung on to optimism over a report that Washington might ease tariffs on Chinese goods.

Equity markets will be closed on Monday (http://www.marketwatch.com/story/which-stock-markets-and-bond-are-closed-for-martin-luther-king-jr-day-2019-01-18) in observance of Martin Luther King Jr. Day.

How are benchmarks faring?

The Dow Jones Industrial Average rose 129 points, or 05%, to 24,500; the S&P 500 index gained 15 points, or 0.6%, to 2,651; and the Nasdaq Composite added 31 points, or 0.4%, to 7,112.

For the week, the Dow and S&P 500 are each up 2.1% and the Nasdaq Composite is looking at a gain of 2%.

Brexit Brief: General election talk grows louder in Westminster (http://www.marketwatch.com/story/brexit-brief-general-election-talk-grows-louder-in-westminster-2019-01-18)

What's driving the market?

Stocks got a late lift Thursday after The Wall Street Journal reported (https://www.wsj.com/articles/u-s-weighs-lifting-china-tariffs-to-hasten-trade-deal-calm-markets-11547754006?mod=hp_lead_pos1) that U.S. officials were debating a possible ease in tariffs on Chinese imports, to give Beijing incentive to make deeper concessions over the trade dispute.

A Treasury spokesman immediately walked back the report, telling the newspaper that any bargaining positions remained "at the discussion stage." The source also said neither Treasury Secretary Steven Mnuchin nor U.S. Trade Representative Robert Lighthizer have made any specific trade-related recommendations, and talks were still ongoing.

Nevertheless, markets remain optimistic.

Meanwhile, investors continue to digest a new round of earnings reports, like those from Netflix Inc. (NFLX), which reported strong subscriber and profit growth (http://www.marketwatch.com/story/netflix-earnings-and-subscriber-additions-beat-expectations-but-stock-falls-2019-01-17), but missed on revenue. The stock is trading down in the premarket, but its 32% rise year-to-date reflects the glass-half-full sentiment that has overtaken markets in recent weeks.

What's driving the market?

"With the shutdown slowly taking 0.1 percentage points of GDP each week, the president knows a victory in resolving the trade war can give him leverage on continue his battle with Democrats on his border wall funding," wrote Edward Moya, market analyst at OANDA in a Friday morning note.

"Yesterday's Wall Street Journal report that Treasury Secretary Steven Mnuchin reportedly proposed the idea of lifting some or all the tariffs gave stocks a strong bid. It was quickly refuted by the Treasury, but story shows how anxious markets are in looking for positive momentum to continue with trade talks," he added.

"From an earnings standpoint, results continue to be better than feared," Tom Essaye, president of the Sevens Report wrote in a Friday-morning note to clients. "Industrials have posted solid results so far in earnings season, and that is a positive if it continues throughout the rest of the season."

Meanwhile, the "market continues to act resiliently," in the face of any bad news, like Morgan Stanley's disappointing earnings, he wrote.

What data and Fed speakers are investors watching?

New York Fed President John Williams, a voting member of the rate-setting Federal Open Market Committee, said that the Federal Reserve should respond "carefully" to a U.S. economy that appears to be slowing, in a speech to the New Jersey Bankers Association's Economic Leadership Forum.

""But let me be clear: a softer economic outlook doesn't mean we should prepare for doom and gloom," he added.

U.S. industrial production rose 0.3% in December, the Federal Reserve reported Friday morning, in line with expectations, per a MarketWatch poll of economists.

Philadelphia Fed President Patrick Harker, a nonvoting member of the FOMC, will give a speech on the future of Philadelphia at 11 a.m.

Which stocks are in focus?

Tesla Inc. (TSLA) shares fell 7.6% (http://www.marketwatch.com/story/tesla-to-cut-jobs-by-around-7-says-ceo-elon-musk-2019-01-18)after the company announced job cuts and warned on profits.

Netflix(NFLX) shares retreated 1.8% early Friday, indicating investor dissatisfaction with the streaming video service giant's fourth-quarter results (http://www.marketwatch.com/story/netflix-earnings-and-subscriber-additions-beat-expectations-but-stock-falls-2019-01-17) and upbeat calls from Wall Street analysts (http://www.marketwatch.com/story/netflixs-stock-drop-after-results-despite-upbeat-analyst-calls-2019-01-18). The pullback comes after a massive run-up in the share price over the past few weeks.

Shares of American Express Co. (AXP) traded 2.6% lower Friday, after the financial-services company reported mixed fourth-quarter results (http://www.marketwatch.com/story/american-express-swings-to-profit-narrowly-misses-revenue-expectations-2019-01-17) Thursday evening.

SunTrust Banks Inc. (STI)stock rose 2.4% in premarket action, after the bank reported better-than-expected profits.

Shares of Tiffany & Co.(TIF) rose 2.7%, even after the luxury jewelry retailer reported holiday-period sales that declined from a year ago and provided a downbeat full-year profit and sales outlook. The stock has fallen 35% over the past six months.

Eli Lilly and Co. (LLY) stock was down 2.5% early Friday, after the company said (http://www.marketwatch.com/story/eli-lilly-shares-slide-premarket-on-news-of-failed-trial-for-sarcoma-treatment-2019-01-18) a late-stage trial of a treatment for sarcoma failed to meet its main goals.

Shares of VF Corp. (VFC) rose 13.8%, after the parent company of Vans and The North Face reported better-than-expected earnings and sales.

How did the benchmarks fare yesterday?

On Thursday, the Dow erased an earlier loss to rise 162.94 points, or 0.7%, to 24,370.10 in choppy trade. The blue-chip gauge was up 267 points at its session high. The S&P 500 added 0.8% to 2,635.96 and the Nasdaq gained 0.7% to finish at 7,084.46.

How are other markets trading?

Markets in Asia surged (http://www.marketwatch.com/story/asian-markets-rise-on-hopes-of-progress-for-us-china-trade-talks-2019-01-17), led by a 1.4% jump for China's Shanghai Composite Index . In Europe, the Stoxx Europe 600 rose 1.6%.

Crude oil was also moving higher (http://www.marketwatch.com/story/oil-prices-push-higher-on-hopes-for-us-china-trade-progress-2019-01-18), while gold is falling and the U.S. dollar was steady.

(END) Dow Jones Newswires

January 18, 2019 09:51 ET (14:51 GMT)

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