Bad news is good news this morning. Despite disappointing economic data, markets in Asia and Europe delivered steady gains, pushing U.S. stocks to join the party and move higher.
PMI for both Japan and the euro zone dropped, but Japan and Hong Kong markets both closed higher by 1.6 percent. China remains closed for Golden Week. The major European indices all traded higher across the board.
The S&P 500 rose 19 points to 1,970, the Dow Jones Industrial Average climbed 152 points to 16,624 and the Nasdaq increased 39 points to 4,747.
As expected, American Apparel filed for Chapter 11 bankruptcy with a public announcement at 12:34 a.m. EST Monday morning. The embattled retailer was facing a debt payment on Oct. 15 that many investors were confident the company didn’t have the cash on hand to pay. The stores will remain open as the company goes forward with its restructuring. The debt will be reduced from $300 million to $135 million and $20 million will cut its annual interest expense. Former chief executive officer Dov Charney is the largest shareholder with over 74 million shares that are now essentially worthless.
The U.S. has reached a deal on the Trans-Pacific Partnership after making progress on negotiations last week. Advances were made on some of the sticking points and car manufacturing that have been holding back the agreement. The deal will lower trade barriers for goods and services between the U.S., Japan and 10 countries in the Pacific. It will also set commercial rules for two-fifths of the global economy. The U.S. will benefit from opening agricultural markets in China and Japan, while tightening intellectual property rules that will help drug and technology companies.
Option traders apparently believe Lululemon is on the comeback. Option trades that are betting the price of the stock will rise jumped last week. The stock has dropped by 20 percent over the past three months to $51.12. The option trading last Friday was 30 percent higher than normal.
Twitter officially named Jack Dorsey as its permanent chief executive officer. Dorsey was a company cofounder, but he’s also chairman at Square, the online payments company that is expected to go public this year. Dorsey has been pushing through changes at Twitter faster than the previous ceo, Dick Costolo. Twitter stock is rising over 2 percent this morning to $27.05.
In other global news, Saudi Arabia cut prices on oil sales over the weekend. The Saudis are fighting to hold onto their market share in oil and continue to keep pumping crude and dropping prices. The price war hasn’t come without pain — the country’s foreign exchange reserves are at the lowest level in 32 months.