The stock market had broad-based gains on Wednesday morning, responding favorably to signs that a trade deal between China and the U.S. might be close to completion. As of 11:40 a.m. EDT, the Dow Jones Industrial Average (DJINDICES:^DJI) was up 76 points to 26,255. The S&P 500 (SNPINDEX:^GSPC) picked up 16 points to 2,883, and the Nasdaq Composite (NASDAQINDEX:^IXIC) climbed 79 points to 7,928.

An interesting conflict between Netflix (NASDAQ:NFLX) and the group that hands out the Oscars took a new turn, as the Justice Department stepped in with some concerns of its own that add a new angle to the controversy. Meanwhile, despite signs of improved trade relations, construction equipment giant Caterpillar (NYSE:CAT) faced a downgrade from analysts who believe that it might not be able to grow at the pace that investors have hoped.

Is the Academy a monopoly?

Shares of Netflix climbed 1% as the streaming video specialist remained at the center of a controversy that's growing in scope. Some high-profile players in the movie business had said the Academy of Motion Picture Arts and Sciences, which awards the Oscars every year, shouldn't consider Netflix movies for Academy Awards if they were available only in limited releases in brick-and-mortar movie theaters. Those comments follow efforts from other groups, including the Cannes Film Festival, that were successful in persuading Netflix to withdraw films from consideration.

Icon showing Netflix logo and Recommended TV slogan.

Image source: Netflix.

However, the federal government has apparently stepped into the fray. A letter from the Justice Department to the Academy warns that if the group tries to prevent Netflix or other streaming video services from being eligible for Oscars, then there could be antitrust implications that could raise greater scrutiny from regulators. Specifically, if ineligibility for Oscars leads to lower revenue, then rules that impermissibly make Netflix or competing streaming services ineligible could violate laws against monopolies and oligopolies.

Netflix has argued that not everyone has access to movie theaters that will show an unlimited number of films, making it important for it to serve its customer base by offering those films through streaming video. Netflix also believes that it offers a vehicle for filmmakers who might not win a theatrical release to have their work shown. With the Justice Department stepping in, it'll be interesting to see how the Academy and established filmmakers react -- and whether Netflix films will keep winning Oscars in the years to come.

Will slowing economic growth hurt Caterpillar?

Shares of Caterpillar bounced back from early losses to trade near the unchanged level after the heavy-equipment manufacturer received negative comments from a prominent financial institution. Stock analysts at Deutsche Bank cut their rating on Caterpillar from buy to hold and reduced their price target by $24 to $128 per share.

Deutsche Bank believes that Caterpillar faces challenging macroeconomic conditions that could threaten its growth. In particular, the analysts point to slowing growth in China, particularly sharp economic weakness in Europe, and a glut of construction equipment in the U.S. market. In response, they expect that Caterpillar will experience its peak in the business cycle this year.

Caterpillar has faced criticism from other European stock analyst companies before, but the big question is whether the negative views start becoming more predominant. Investors still expect Caterpillar earnings to rise 10% this year and almost 8% next year. So if it turns out that a slowdown is imminent, then those expectations will have to come down -- potentially leading to a more prolonged decline in Caterpillar shares.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.