U.S. stocks traded higher Thursday, with all three major benchmarks touching new records, after reports that Beijing and Washington will cancel planned import tariffs in stages, a development that could help propel benchmark indexes to new highs.
How are major benchmarks performing?
The Dow Jones Industrial Average DJIA, +0.89% rose 260 points, or 0.9%, to 27,751, while the S&P 500 index SPX, +0.59% gained 19 points, or 0.6%, to 3,096. The Nasdaq Composite index COMP, +0.77% added 64 points, or 0.8%, to 8,474.
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.
What’s driving the market?
Major U.S. stock indexes have been setting new records in recent sessions, with investors clinging to developments over a long-awaited interim trade deal between the U.S. and China. Reports that such a deal could be delayed until December, as talks continue over terms and a venue, dented enthusiasm for stocks on Tuesday.
Strategists have been concerned that the market may be placing too much emphasis on a preliminary, or “Phase One,” trade deal coming to fruition soon.
But the mood shifted again 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.
“Trading got off to a volatile start on Thursday as negative headlines late on Wednesday quickly turned positive,” wrote Raffi Boyadjian, senior investment analyst at XM, wrote in a Thursday note. “Risk aversion abruptly faded after Bloomberg today reported that the US and China have agreed to scale back some of the tit-for-tat tariffs they’ve imposed on each other’s goods,” 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.
Which stocks are in focus?
Qualcomm Inc. QCOM, +8.57% 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 8.9% Thursday and have risen more than 58% year-to-date.
Shares of Cardinal Health Inc. CAH, +5.56% rose 5.8% 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 opiod lawsuits. Excluding these charges, earnings-per-share and revenue beat analyst forecasts.
Shares of Expedia Group Inc. EXPE, -25.50% fell 25.6% Thursday after the travel website reported worse-than-expected earnings results after the close of trade Wednesday.
AMC Entertainment Holding Inc. AMC, +3.82% 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 3.7%.
Shares of PG&E Corp. PCG, -6.21% tumbled 6.3% after the utility swung to a third-quarter loss after it took a $2.5 billion charge for losses related to California wildfires.
Shares of Nielsen Holdings PLC NLSN, -9.61% fell 8.8% 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 Inc. BIDU, +12.36% 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, +6.18% jumped 10.6 basis points to 1.914% on Thursday, from 1.814% late Wednesday as trade tensions appeared to ease.
December gold GCZ19, -1.37% on Comex skidded 1.25% lower to $1,474 an ounce after a 0.6% gain a day ago.
West Texas Intermediate crude for December delivery CLZ19, +1.53% popped 1.2% amid the upbeat trade developments to $57.07 a barrel on the New York Mercantile Exchange.
The ICE U.S. dollar index DXY, +0.20%, a gauge of the greenback’s performance against six major rivals, was virtually unchanged.
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, +0.41% traded 0.4% higher.