U.S. stock indexes looked likely to test new records on Thursday as investors turned to fresh progress on a partial China trade pact, amid easing of Middle East tensions.
How are benchmarks performing?
Futures for the Dow Jones Industrial Average YMH20, +0.39% were up 108 points, or 0.4%, at 28,857, while those for the S&P 500 index ESH20, +0.35% were trading 11.05 points, or 0.3%, higher at 3,271.25 and Nasdaq-100 futures NQH20, +0.60% were adding 51.5 points to reach 8,996.50, a gain of 0.6%.
On Wednesday, the Dow DJIA, +0.56% ended the session up 161.41 points, or 0.6%, to 28,745.09, the S&P 500 SPX, +0.49% gained 15.87 points, or 0.5%, to close at 3,253.05, and the Nasdaq Composite Index COMP, +0.67% finished up 60.66 points, or 0.7%, at 9,129.24.
The Nasdaq closed at an all-time high on Wednesday, while the Dow is off 0.4% from its Jan. 2 record and the S&P 500 is off 0.2% from its all-time closing high. Both the S&P and Nasdaq carved out fresh intraday records in the previous session.
Read: The S&P 500 is now more overvalued than ever, per this measure
What’s driving the market?
Chinese top trade negotiator Vice Premier Liu will lead a delegation to Washington next week to sign a phase-one trade deal, the Wall Street Journal reported Thursday, citing China’s Commerce Ministry.
A partial trade agreement was expected to be signed on Jan. 15, but Beijing until Thursday had remained silent on any deal-signing ceremony, the Journal noted. Trade negotiations have been a key catalyst for market moves over more than a year because President Trump’s imposition of import tariffs has slowed global economic growth.
Progress on China trade talks has helped, at least momentarily, put the threat of conflict between the Washington and Tehran on the back burner after the Islamic Republic late Tuesday launched a missile strike on U.S. military bases in Iraq in retaliation for the killing of one of its top generals.
Moreover, market sentiment was buoyed following remarks by President Trump, who responded to the Iranian attacks by Iran by downplaying their importance, saying that no U.S. casualties were sustained and that only ‘minimal’ damage was done to U.S. military facilities in Iraq.
“Yesterday afternoon President Trump issued a statement in relation to Iran, and he made it clear that he wasn’t pushing for an all-out war with the regime, which was a weight off traders’ minds,” wrote David Madden, market analyst at CMC Markets UK, in a daily research note.
The lack of bellicosity in Trump’s Wednesday speech helped markets that had already been breathing a sigh of relief, burst higher, following the Mideast skirmish.
“The US and Iran are still at odds with each other, but as long as a conflict doesn’t seem to be on the horizon, the feel good factor is likely to last,” the CMC analyst wrote.
In economic data, the number of Americans newly applying for jobless benefits during the seven days ended Jan 4. fell for the fourth week in a row to 214,000, near post-recession lows.
Meanwhile a number of members of the Federal Reserve are expected to make public appearances. Vice Chairman Richard Clarida gave a speech to the Council of Foreign Relations Thursday morning, and said that the economy was in a good place, but stressed that the Fed’s monetary policy is not on a “preset course.”
Federal Reserve Bank of Minneapolis Neel Kashkari is expected to speak at 9:30 a.m., New York Fed President John Williams will appear at 11:30 a.m. and Richmond Fed President Tom Barkin and Chicago Fed President Charles Evans also slated to appear later Thursday.
See also: World Bank predicts modest global 2020 rebound, but trade war remains a risk
Which stocks were in focus?
Uber Technologies UBER, +3.41% introduced changes to its service in California, including giving drivers the ability to reject rides without penalty, while eliminating preset for riders, as it attempts to make a stronger case that its drivers are independent contractors and not employees. Shares rose 1.4% before the start of trade Thursday.
Kohl’s Corp. KSS, -1.57% shares slid 7.8% in premarket trade after the retailer reported declining comparable holiday-season sales.
Bed Bath & Beyond BBBY, -1.13% shares tumbled 12.2% in premarket action after the retailer reported a quarterly loss tied to weaker sales during the holiday period Wednesday evening.
Boeing Co.’s stock BA, -1.75% remain in focus after reports showed that a 737 airplane—not the Max - was already on fire before crashing in Iran, en route to Kyiv, Ukraine, killing all 167 passengers and nine crew members on board. Iran has so far refused to provide a black box that was retrieved after the crash to aviation investigators.
Macy’s Inc.’s shares M, +2.43% were in focus after the retailer said it plans to shut nearly 30 locations after its sales fell during the holiday months. Shares were down 0.7% in the premarket.
HP Inc. HPQ, +1.31% again spurned a takeover bid by Xerox Holdings Corp. XRX, -0.06% in a terse letter Wednesday.
Verizon VZ, +0.19% is eliminating traditional cable bundles and the handcuffs that often came with them, making it easier for households to switch video packages in the hopes they won’t cut the cord entirely.
How are other markets trading?
Government bond rates were edging higher, with the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +0.77% up 1 basis point to 1.881%.
In commodities markets, the price of a barrel of West Texas Intermediate crude oil for February delivery CLG20, -0.34% gained 11 cents, or 0.2% to $59.70. As for precious metals, the gold prices were losing ground, with an ounce of gold for February delivery GCG20, -0.68% declining $8.50, or 0.5% to $1551.70.
The U.S. dollar was edging higher, up 0.1% according to the ICE US dollar index DXY, +0.10%.
In Asia overnight, stocks rallied. The China CSI 300 000300, +1.27% gained 1.3%, Japan’s Nikkei 225 NIK, +2.31% added 2.3% and Hong Kong’s Hang Seng index HSI, +1.68% rose 1.7%.
European stocks were edging higher, with the Stoxx Europe 600 SXXP, +0.35% rising 0.3%.
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January 09, 2020 at 07:39PM
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Dow seen testing all-time high as stock-market focus shifts from Iran to U.S.-China trade - MarketWatch
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