Stocks opened higher to maintain their ascent toward records Monday morning as analysts tied the an upbeat tone to a preliminary U.S.-China trade deal struck last week, though questions remained over the details of the long-awaited “phase one” accord.
What are major indexes doing?
The Dow Jones Industrial Average DJIA, +0.67% advanced 172 points, or 0.6%, to 28,312, on pace to set its first closing all-time high since Nov. 28. The S&P 500 SPX, +0.85% rose 23 points, or 07%, to 3,192. The Nasdaq Composite Index COMP, +1.07% jumped 79 points, or 0.9%, to 8,815. All three main benchmarks set new intraday records on Monday.
Stocks capped a winning week Friday with small gains. The Dow saw a 0.4% weekly advance to end at 28,135.38, while the S&P 500 saw 0.7% rise to end 3,168.80. The Nasdaq logged 0.9% weekly rise, ending at 8,734.88.
What’s driving the market?
Monday’s ascent for equities was an extension of last week’s optimism after President Donald Trump and Chinese officials announced a so-called phase one trade pact on Friday that included a partial rollback of some tariffs and the scrapping of further U.S. duties on Chinese imports that were due to take effect on Sunday, while Beijing promising targeted agricultural purchases.
U.S. Trade Rep. Robert Lighthizer on Sunday told CBS that the phase-one China deal was “totally done.” He said the deal goes beyond agriculture to address intellectual property issues, has strong enforcement provisions and addresses financial services and currency issues. A number of contentious issues remain to be resolved in further “phase two” talks, which have yet to be scheduled. The deal is expected to be signed in January, he said.
Read: China says it will put off tariff hike on U.S. autos, other goods following trade deal
“The most important thing that happened with the phase-one deal was that we have moved from a one-year long period of escalation to de-escalation,” said Allan von Mehren, analyst at Danske Bank, in a note. But a lack of detail could serve to temper investor enthusiasm, he said.
It is “unusual” to announced a deal before it has been completed with all legal text that both sides have agreed to, von Mehren said. The lack of text adds to the sense that the announcement of the pact was “not coordinated.”
In economic reports, the Empire State manufacturing index came in at 3.5, slightly higher than November’s 2.9 reading. In addition, the results of the Markit purchasing managers survey for December are arriving in the morning.
See: The locomotive of the U.S. economy might be losing steam
What companies are in focus?
Shares of Dow component Boeing Co. BA, -2.94% were off 3.8% on Monday. The Wall Street Journal reported the plane maker is considering either halting or further cutting production of the 737 Max aircraft amid growing uncertainty over the troubled airplane’s return to service.
Shares of PG&E Corp. PCG, -13.52% fell 22% after California Gov. Gavin Newsom demanded changes to the utility’s plan to pay wildfire victims and exit bankruptcy.
FedEx Corp. shares FDX, +1.44% were slightly higher on Monday after J.P. Morgan raised the company’s stock price target to $154 a share from $140 a share.
Uber Technologies Inc. stock UBER, +5.28% was in focus after news reports said the ride-hailing app company was in talks to sell its food delivery business in India to a local competitor.
What are other markets’ doing?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +2.33% climbed 3.6 basis points to 1.86% as haven demand waned. Bond prices move in the opposite direction of yields.
West Texas Intermediate crude CLF22, -0.32% on the New York Mercantile Exchange gained 3 cents, or less than 0.1%, to $60.09 a barrel. As for precious metals, February gold GCG20, -0.04% on Comex rose $1, or 0.1%, to $1,476.60 an ounce.
The U.S. dollar, as measured by the ICE U.S. Dollar Index DXY, -0.14%, was down 0.2% at 96.99, against a basket of a half-dozen currency peers.
In overseas stock-market bourses, the Stoxx 600 Europe index SXXP, +1.53% climbed 1.3% to trade at 417.48. China’s CSI 300 benchmark 000300, +0.49%, comprised of equities listed in Shanghai and Shenzhen, closed higher by around 0.5%.
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December 16, 2019 at 09:54PM
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Stocks carve out fresh records as preliminary U.S.-China trade deal lifts optimism - MarketWatch
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