United States stocks rise after signing of ‘Phase 1’ trade deal

Darnell Taylor
January 16, 2020

At 2.27pm ET, the Dow Jones Industrial Average was up 0.54 per cent at 29,095.54 points, while the S&P 500 gained 0.33 per cent to 3,293.84.

(MENAFN - Baystreet.ca) Stocks rose on Wednesday, but gave up most of their gains heading into the close even after the US and China signed a highly anticipated phase-one trade agreement as most of the details were already known and investors anticipated some speed bumps on the way to phase two's signing.

An early look at the S&P sectors shows defensive oriented real estate (+0.6%), health care (+0.6%) and utilities (+0.6%) outperforming the broader market, while financials (-0.7%) and energy (-0.5%) are off to a weak start.

The three main stock indices gave up earlier intraday record highs, with disappointing earnings reports from Bank of America pushing the S&P financial index down 0.55 per cent. The Dow rose 90.55 points, or 0.3%, to 29,030.22.

The Nasdaq Composite .IXIC added 0.08% to 9,258.70, just short of its record high close set on Monday.

Target (TGT) plunged 6.6% after reporting weak holiday same-store sales.

Prices for the 10-Year U.S. Treasury gained, lowering yields to 1.78% from Tuesday's 1.81%.

President Donald Trump and China's chief negotiator, Liu He, signed the "Phase 1" deal on Wednesday before a group of corporate executives and reporters at the White House.

Investment manager BlackRock was 2.17% firmer after it posted a 40% rise in quarterly net profits, with its earnings per share exceeding consensus expectations.

"While it does not appear that the "phase one" deal addresses numerous structural issues that started the trade spat, it does mitigate the uncertainty that ongoing trade tensions present, namely the threat of new tariffs at a moment's notice", said Jason Pride, chief investment officer of private wealth at Glenmede Trust Co.in Philadelphia.

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President Trump "wants the USA economy to be humming along going into the presidential election", said Lyn Graham-Taylor, fixed-income strategist at Rabobank. The S&P 500 Index climbed as investors took solace from an easing of tensions between the world's two largest economies, though ended the session off its high.

Australian shares surged past the 7,000 level for the first time ever on Thursday, as demand for risky assets increased after China and the United States signed a deal to defuse their trade war that has roiled financial markets over the last 18 months.

Aerospace companies Hexcel Corp HXL.N and Woodward Inc WWD.O jumped 9.6% and 4.8%, respectively, after the two Boeing suppliers said they would combine in an all-stock merger valued at $6.43 billion.

West Texas Intermediate crude oil added 0.5% to $58.10 a barrel.

Benchmark crude oil fell 42 cents to settle at $57.81 a barrel. Brent crude oil, the worldwide standard, picked up 41 cents to $64.41 per barrel.

Wholesale gasoline fell 1 cent to $1.64 a gallon. Natural gas fell 7 cents to $2.12 per 1,000 cubic feet.

Gold rose $ 9.70 to $ 1,552.10 an ounce, silver rose 25 cents to $ 17.92 an ounce, and copper fell 1 cent to $ 2.87 a pound.

The dollar slipped to 109.88 Japanese yen from 109.97 yen on Tuesday. The euro strengthened to $1.1150 from $1.1128.

Overnight in Asia, markets finished lower.

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