Stock market news: October 17, 2019 – Yahoo Finance

U.S. stocks closed higher as investors weighed early optimism over a Brexit deal against a mixed batch of corporate earnings results.

A 5.5% decline in shares of IBM (IBM), a Dow component, capped gains in the 30-stock index during Thursday’s session. This came after the tech company reported weaker-than-expected sales results for the fiscal third quarter after market close Wednesday.

Here’s how the markets settled at the end of Thursday’s trading session:

• S&P 500 (^GSPC): +0.28%, or 8.26 points

• Dow (^DJI): +0.09%, or 23.90 points

• Nasdaq (^IXIC): +0.40%, or 32.67 points

• Crude oil (CL=F): +1.27% to $54.04 per barrel

• Gold (GC=F): +0.10% to $1,495.50 per ounce

Top UK and EU officials said Thursday that they reached a new Brexit deal, completing the agreement just before EU leaders were set to review it in Brussels.

In a Twitter post Thursday, British Prime Minister Boris Johnson said the sides “got a great deal that takes back control,” and indicated that Parliament could get Brexit done as soon as Saturday. EU Commission President Jean-Claude Juncker, for his part, called the deal a “fair and balanced agreement.” The EU is widely expected to approve the deal during its two-day summit in Brussels, which began Thursday.

UK equities and the British pound surged against the dollar (GBPUSD=X) and euro (GBPEUR=X) following the announcements. However, these pared some gains after other lawmakers came out and cast doubt on the prospects of Parliament passing the deal. The Democratic Unionist Party (DUP) issued a statement saying, “As things stand, we could not support what is being suggested on customs and consent issues, and there is a lack of clarity on VAT.”

The backing of the 10 DUP members of Parliament will be instrumental for the deal’s passage, given that Johnson does not have a majority in Parliament, and many Conservative MPs have suggested they will not vote for the agreement in absence of unionist support.

Other geopolitical negotiations have continued to trudge along.

Chinese officials are working on drafting the text of a “phase one” trade agreement with their U.S. counterparts, a Chinese Ministry of Commerce spokesman said during a briefing, according to Bloomberg. Ministry spokesperson Gao Feng said China will increase purchases of American agricultural products “according to domestic needs,” according to Bloomberg’s report and translation, but declined to confirm whether China would hit the $40 to $50 billion in annual purchases that President Donald Trump has previously touted.

Earnings update

The first major week of third-quarter corporate earnings results has so far largely reflected positively on reporting companies, helping to assuage fears of a year-over-year decline in aggregate earnings per share (EPS) for S&P 500 members. Heading into third-quarter results, Wall Street consensus was looking for aggregate EPS to drop around 3% over last year, for the first decline since 2016.

Late Wednesday, Netflix (NFLX) kicked off “FAANG” results with better-than-expected earnings, and slightly topped estimates for international subscriber growth. Operating margins improved 670 bps year-over-year to 18.7%, topping the company’s prior guidance. Netflix also reiterated its negative free cash flow guidance for the fiscal year of -$3.5 billion, and said it is tracking to stem some of its outflow in 2020.

The Street largely shrugged off the light guidance for fourth-quarter earnings and new subscribers, which Netflix said reflected uncertainty around variables including new title launches, subscriber churn and competition from new entrants to the over-the-top streaming arena.

Meanwhile, big bank earnings results continued with Morgan Stanley (MS) before the bell on Thursday. The company beat expectations on nearly every major metric, circumventing the softness analysts had expected to see in big bank earnings this reported quarter as lower rates cut into big bank profitability.