United States stocks gain ahead of trade deal signing

Marco Green
January 14, 2020

The Nasdaq Composite jumped 1.04 per cent to 9,273.93, also a record high.

The broad index of large USA companies gained 22.78 points, or 0.7%, to close at 3288.13, a new high.

In the cash market on Monday, the S&P 500 Index settled at 3288.13, up 22.78 or +0.70%.

The Dow Jones Industrial Average rose 0.29 per cent to end at 28,907.05, while the S&P 500 gained 0.70 per cent to 3,288.13, its highest close ever.

The S&P 500 posted 64 new 52-week highs and 1 new low; the Nasdaq Composite recorded 155 new highs and 31 new lows.

The deal, which is scheduled for signing on Wednesday, is expected to lower tariffs on some Chinese-made goods, as well as increase China's purchases of USA agricultural products.

The dollar index rose 0.03%, with the euro up 0.13% to $1.1134. The health-care sector fell 0.4%, weighed down by declines in shares of managed-care companies.

Stocks were in positive territory the whole session, gaining ground following a report that the United States would formally retract its accusation that China manipulates its currency to gain unfair trade advantages.

Chipmakers were among the gainers in the technology sector. General Electric rose 3.9%.

The yield on the benchmark 10-year U.S. Treasury rose to 1.846%, from 1.825% Friday. The pickup in yields helped lift financial stocks, as higher yields make it possible for banks to charge higher interest rates on mortgages and other consumer loans. Goldman Sachs rose 1.3 percent, and Citigroup gained 1.8 percent.

Electric auto maker Tesla leaped 9.8%, closing above $500 for the first time.

Netflix climbed 3% as the streaming video service earned two best picture nominations for the 92nd annual Academy Awards. Martin Scorsese's "The Irishman" and Noah Baumbach's "Marriage Story" are both contenders.

Aerospace companies Hexcel Corp and Woodward Inc jumped 9.6 per cent and 4.8 per cent, respectively, after the two Boeing suppliers said they would combine in an all-stock merger valued at $US6.43 billion ($A9.31 billion). Woodward rose 4.8 percent and will own the majority of the combined company when the deal closes. Some of the biggest US banks kick off earnings season Tuesday, amid forecasts that overall corporate profits will show the smallest growth in three years. JPMorgan Chase, Wells Fargo and Citigroup will report fourth-quarter earnings Tuesday, and Bank of America will follow suit Wednesday.

Companies in the S&P 500 are projected to report a 2.0 per cent drop in earnings for the quarter, according to Factset.

"The management outlooks for this quarter are probably going to be as much, if not more important, than the actual numbers themselves", Ladner said.

Wall Street will also have several economic reports to consider this week, including government reports on consumer prices, retail sales and home construction.

Gold fell 0.6% to $1538.West Texas Intermediate crude rose 0.3% to $58.25 a barrel. Brent crude oil, the worldwide standard, slid 78 cents to close at $64.20 a barrel.

The Bloomberg Dollar Spot Index was little changed at 1,192.76.

The British pound steadied at $1.2991 after an 0.6% decline.

Gold, considered a safe haven during political and economic turmoil, rose last week to an nearly seven-year peak of $1,610.90 an ounce after a USA drone strike killed a top Iranian commander in Baghdad and Iran launched missiles against US troops in Iraq in retaliation.

Other reports by Click Lancashire

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