Dow, S&P 500 and Nasdaq hit record levels after report China, U.S. agree to cancel tariffs in stages


U.S. stocks traded higher Thursday, with all three major benchmarks touching new records, after reports that Beijing and Washington may cancel planned import tariffs in stages.

The benchmark Russell 2000 index of smaller, domestically-focused companies, which had been more reluctant to join the recent market rally, also was edging higher.

How are major benchmarks performing?

The Dow Jones Industrial Average rose 250 points, or 0.9%, to 27,742, while the S&P 500 index gained 16 points, or 0.55%, to 3,093. The Nasdaq Composite index added 60 points, or 0.7%, to 8,471.

The Dow was trading above its record close of 27,492.63, set Tuesday, while the S&P 500 rose above its record close of 3,078.27 set on Monday and the Nasdaq was above its all-time ending high of 8,434.68, also set Monday. All three benchmarks notched new intraday records Thursday morning, as well.

On Tuesday, the Dow lost less than a point to end at 27,492.50, while the S&P 500 index gained 2.16 points, or 0.07%, at 3,076.78. The Nasdaq Composite Index  shed 24.05 points, 0.29%, closing at 8,410.63.

The Russell 2000 was up 10 points, or 0.64%, to 1,599, or more than 8% away from its record close of 1,740.75 set on August 31, 2018.

What’s driving the market?

Major U.S. stock indexes have been setting new records in recent sessions, with investors encouraged by reports of progress on an interim trade deal between the U.S. and China.

Early Thursday after Bloomberg reported China and the U.S. will cancel planned tariffs on each other’s products in stages, with the first agreement due to be signed in the next few weeks. The amount of tariff relief that’s coming will depend on what’s in that deal, said Ministry of Commerce spokesman Gao Feng, according to the South China Morning Post.

“Certainly the mood keeps getting better on trade,” said Bruce Bittles, chief investment strategist at Robert W. Baird & Co., in an interview. “The reason that is important is because the global economy looked like it was moving toward recession due to the trade war. So the fact that we’re moving closer to some sort of deal, I think the markets are celebrating.”

“In addition, perhaps the European economy, Japan and even China, maybe, have bottomed here, in terms of their economies weakening,” he added,

Investors were also eyeing developments in Europe, after the European Central Bank issued an update on economic and monetary developments that predicted sluggish but positive economic growth in the second half of 2019.

In U.S. economic data, the Labor Department estimated that 211,000 Americans filed new unemployment claims in the week ended Nov. 2, a one month-low and below the 215,000 predicted by economists polled by MarketWatch.

Investors will be watching for commentary from Fed officials, with Dallas Fed Presdient Rob Kaplan due to speak at 1 p.m. Eastern Time and Atlanta Fed President Raphael Bostic at 7 p.m. Both are non-voting members of the central bank’s interest-rate setting committee.

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Which stocks are in focus?

Qualcomm IncQCOM, +6.87%  reported fiscal fourth quarter earnings and sales that fell less than Wall Street had forecast Wednesday after the close, while projecting the current quarter will also result in year-over-year declines in profit and revenue. Shares rose 7.6% Thursday and have risen more than 60% year-to-date.

Shares of Cardinal Health IncCAH, +4.79%   rose 45% Thursday after reporting a $4.92 billion loss in the fiscal first quarter, due to an agreement in principle reached in October to pay $5.56 billion to settle pending and potential opioid lawsuits. Excluding these charges, earnings-per-share and revenue beat analyst forecasts.

Shares of Expedia Group IncEXPE, -26.31%  fell 25.6% Thursday after the travel website reported worse-than-expected earnings results after the close of trade Wednesday.

AMC Entertainment Holding IncAMC, -1.55%  said Thursday that it recorded a net loss in the third quarter that was smaller than the year ago period, but larger than analysts had forecast, while revenue rose. The cinema chain operator’s stock rose more than 2%.

Shares of PG&E Corp. PCG, -12.72%  tumbled almost 9% after the utility swung to a third-quarter loss after it took a $2.5 billion charge for losses related to California wildfires. The embattled utility said Thursday that it anticipates those costs to escalate to as much as $6.3 billion.

Shares of Nielsen Holdings PLC NLSN, -4.03%  fell nearly 5% after the media measurement company beat earnings expectations for the third quarter, but also announced it was cutting its dividend by 83% and that it plans to spin off its Global Connect business as an independent, publicly traded company.

U.S.-traded shares of Baidu IncBIDU, +12.23%  rallied 11.8% after the Chinese Internet giant reported sales and earnings growth Wednesday evening that surpassed Wall Street estimates.

How are others assets trading?

The yield of the 10-year U.S. Treasury note TMUBMUSD10Y, +6.66% jumped 10.6 basis points to 1.914% on Thursday, from 1.814% late Wednesday as trade tensions appeared to ease.

December gold GCZ19, -1.73%  on Comex skidded almost 2% lower to $1,464 an ounce after a 0.6% gain a day ago.

West Texas Intermediate crude for December delivery CLZ19, +2.13%  popped 1.2% amid the upbeat trade developments to $57.54 a barrel on the New York Mercantile Exchange.

The ICE U.S. dollar index DXY, +0.21%, a gauge of the greenback’s performance against six major rivals, was up 0.22%.

In Asia overnight, the China CSI 300 000300, +0.18%  rose 0.2%, the Shanghai Composite SHCOMP, +0.00%  was virtually unchanged. Hong Kong’s Hang Seng Index HSI, +0.57%  climbed 0.6%, while Japan’s NIKKEI 225 Index NIK, +0.11% added 0.1%. In Europe, the Stoxx Europe 600’s SXXP, +0.37% traded 0.4% higher.


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