What's moving markets today: March 27, 2019

Lululemon is hot.

Sales at stores open at least a year increased 7% during Lululemon's most recent quarter compared with a year earlier. Profit grew 28% during the quarter from last year, too.

Men's and women's shorts and yoga pants drove the jump in sales. Lululemon's "men's bottoms" division grew 28% during the quarter.

Wall Street was impressed with the results. Lululemon's (LULU) stock jumped 9% in after-hours trading.

Lululemon's strength signals that demand for athletic clothes continues to rise for both women and men. "The business is running on all cylinders," Jane Hali & Associates said in a research note.

Lululemon has been opening up stores in recent years and expanding beyond yoga pants into workwear and outdoor clothing. The company says it's on pace to hit $4 billion in annual sales in 2020.

North America is Lululemon's largest market, but the company plans to rely more on Europe and Asia for growth in the future.

Lululemon also recently launched two styles of men's boxers and wants to expand its men's business.

"Men's is one of our largest and most exciting areas of the future growth," CEO Calvin McDonald told analysts on a call Wednesday.

Wall Street experienced a mini roller coaster ride on Wednesday.

Stocks opened higher, tumbled in the middle of the day and then mostly recovered.

At the closing bell, the Dow was down 32 points, shaking off an earlier selloff of as much as 232 points.

The S&P 500 declined 0.5% and the Nasdaq finished 0.6% lower.

Investors continue to nervously watch the plunge in global bond yields as a sign of economic jitters. The 10-year Treasury yield fell to 2.38% on Wednesday, the lowest level since December 2017.

Tech stocks struggled, with Salesforce (CRM) and Autodesk (ADSK) retreating. Chip stocks tumbled after Germany’s Infineon issued a profit warning due to weakness in China. Western Digital (WDC) and Advanced Micro Devices (AMD) declined more than 3%.

Energy stocks also declined, led lower by a 1% fall for US oil prices to $59.41 a barrel.

WellCare Health (WCG) jumped 12% after reaching a deal to be acquired by rival Centene. Shares of Centene (CNC) closed 5% lower. 

McDonald's (MCD) is giving up its fight against minimum wage hikes.

The burger chain announced this week it will no longer lobby against raising workers' pay.

"Going forward, McDonald's Corporation will not use our resources, including lobbyists or staff, to oppose minimum wage increases at the federal, state or local levels," wrote Genna Gent, vice president of US government relations for the company, in a letter to the National Restaurant Association.

"Nor will we participate in the association advocacy efforts designed expressly to defeat wage increases," she added.

The move could help the company attract and retain employees in a super-tight labor market. Many companies are raising pay to get ahead of regulation and hire and retain employees. Workers are less attracted to low-paying jobs in a labor market with sub-4% unemployment.

A solid rally on Wall Street has disappeared, giving way to a 200-point drop for the Dow.

Tech stocks led the way lower in early Wednesday afternoon trading, with the Nasdaq sinking 1.3%.

The S&P 500 declined 1%, while the Dow was down 0.8%. The Dow had opened up about 100 points.

There wasn't a clear catalyst for the reversal, but tech stocks took the brunt of the selling. Salesforce (CRM), Advanced Micro Devices (AMD) and Micron Technology (MU) sinking 3% or more apiece. German chipmaker Infineon warned that its profit would miss expectations because of weakness in China, dragging tech stocks lower.

Healthcare stocks were also weak. CVS Health (CVS) and Anthem (ANTH) retreated about 2%. Centene (CNC) tumbled 9% after reaching a cash-and-stock deal to acquire smaller rival WellCare (WCG).

Investors remain concerned about how much longer the US economic expansion will last. A reliable recession indicator was triggered on Friday when the US bond yield curve inverted.

Economic jitters are being underscored by tumbling bond yields as investors pile into the safety of government debt. The 10-year Treasury yield has dropped to 2.37%, down sharply from 2.6% just a week ago.

The stock and bond markets continue to send conflicting signals.

The Dow rose 100 points on Wednesday morning. The S&P 500 and Nasdaq gained 0.2%.

Yet bond yields continue to sink in Europe and the United States, a sign of concern about weakening global economic growth. The 10-year US Treasury yield briefly fell below 2.36% in early trading before rebounding. 

WellCare Health (WCG) jumped 12% on a deal to be acquired by larger rival health insurer Centene. Shares of Centene (CNC) declined 6% on the cash-and-stock transaction.

Southwest Airlines (LUV) gained 2% despite dimming its outlook due in part to the grounding of Boeing (BA) 737 Max jetliners.

Move over growth concerns…the focus switches back to trade. For now.

Expect more pressure to get a deal this morning when the Commerce Department releases the first international trade data of the year at 8:30 am ET. Figures from 2018 showed the biggest trade imbalance with China on record and the biggest overall goods imbalance in history.

Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer start two days of meetings in Beijing tomorrow. A Chinese delegation comes to Washington in April. The grand finale would be a signing ceremony at Mar-A-Lago in late April. My big question: Is a China US trade deal baked in? The S&P 500 is up 19 percent since the December lows.

Here's what investors are watching:

Health care giant Centene (CNC) is buying its smaller Tampa-based competitor WellCare (WCG) for $17.3 billion, the companies announced today.

The deal "will create a premier healthcare enterprise focused on government-sponsored healthcare programs and a leader in Medicaid, Medicare and the Health Insurance Marketplace," they said in a joint statement.

The new entity would have about 22 million members across the country, and a combined revenue of $97 billion.

WellCare shares jumped over 17% in premarket trading, while Centene stock was down 1.8%.