U.S. stocks closed higher Thursday, seizing a fresh round of records, after the market got another shot of confidence from promised trade tariff reductions.
How did benchmarks fare?
The Dow Jones Industrial Average DJIA, +0.30% closed up 88.92 points, or 0.3%, to settle at 29,379.77, after carving out a intraday record at 29,408.05. The S&P 500 index SPX, +0.33% rose 11.09 points, or 0.3% to settle at 3,345.78. The Nasdaq Composite Index COMP, +0.67% advanced 63.47 points, or 0.7% to settle at 9,572.15. All three indexes closed at new records.
For the week, the Dow was up 4%, the S&P 500 index gained 3.7%, and the Nasdaq was 4.6% higher.
What drove the market?
Signs of further progress in Sino-American trade relations were credited for positive sentiment early Thursday. A viral outbreak thought to have originated in Wuhan City, China, and has thus far claimed more than 560 lives, infecting more than 28,000, meanwhile, has been shoved in to the back burner in the minds of equity investors.
Coronavirus update: 565 deaths, more than 28,000 cases worldwide, Yum China reports ‘significant interruption’
China said that beginning Feb. 14 it would cut in half tariffs on some $75 billion of U.S. imports, as part of its phase-one trade resolution with the U.S., according to China’s Ministry of Finance.
Tariffs on an array of U.S. goods will be reduced from 10% to 5%, and from 5% to 2.5% on others, the ministry said. Retaliatory import levies were imposed in September and December as animosities between the Washington and Beijing intensified.
The ministry said the move was made “in order to promote the healthy and stable development of Sino-U.S. economic and trade relations,” according to a translation of the statement.
“China cutting tariffs is a driver of today’s gains,” said J.J. Kinahan, chief market strategist at TD Ameritrade. “If it weren’t for the huge rally we’ve already seen this week, it’s news that would have ignited the market even more than it already has.”
The tariff cuts come as investors have feared that the novel virus in China would hurt the world’s second-largest economy and make it difficult for it to adhere to promises to boost purchases of U.S. goods and services by $200 billion over two years.
Meanwhile, the Senate on Wednesday acquitted President Donald Trump on impeachment charges of abuse of power and obstruction of Congress, as expected. He delivered a speech at noon where he described the impeachment as a “terrible ordeal.”
However, markets have focused on a barrage of mostly upbeat economic data.
The number of Americans newly applying for jobless benefits fell 15,000 to 202,000 during the week ended Feb. 1, near a 50-year low. Productivity growth accelerated in the fourth quarter, the Labor Department said, to 1.4%, below consensus expectations of 1.6% growth, according to a MarketWatch poll.
Dallas Fed President Robert Kaplan told an audience in Austin that he expects “solid” economic growth in 2020 of 2.3%, according to Reuters.
Which stocks were in focus?
- Estée Lauder EL, +5.07% shares rose after an earnings beat.
- Becton Dickinson’s stock BDX, -11.80% slid more than 11% Thursday, as lowered earnings guidance offset its profit beat
- Dunkin’ Brands DNKN, -2.84% lifted its dividend and buyback target as its 2020 outlook fell shy of estimates.
- Twitter Inc.’s stock TWTR, +15.03% rallied about 15% Thursday after it announced its first $1 billion revenue quarter, and a big user-growth beat.
- Shares of Peloton Interactive Inc. PTON, -11.31% slumped 11.3% after earnings and weak third-quarter revenue guidance.
- Casper Sleep Inc. CSPR, +12.50% made its public debut, with its shares rising 12.5% Thursday.
- Coach parent Tapestry TPR, +2.15% reported an earnings beat but said that the impact of the coronavirus was weighing on its outlook.
- Tyson Foods Inc. TSN, -5.16% reported fiscal fourth quarter sales that missed expectations, while earnings beat.
- Taco Bell parent Yum Brands Inc.’s YUM, -2.85% stock fell after the fast-food retailer reported fourth quarter sales that missed projections. Shares ticked down 2.9%.
- Shares of Bristol-Myers Squibb Co. BMY, +2.30% rose after it reported upbeat results.
- Tesla Inc. TSLA, +1.94% shares gained nearly 2%, after opening lower.
- Shares of Zynga Inc. ZNGA, +13.15% added 13% after beating earnings expectations, putting it on pace for its best one-day climb since 2014.
- New York Times Co. NYT, +12.72% shares soared 12.7% after the company topped earning estimates.
How did other markets trade?
Government bonds yields were nearly flat, with the yield on the 10-year Treasury note TMUBMUSD10Y, -0.63% at 1.644%.
Oil prices ended mixed, with a barrel of West Texas Intermediate crude CLH20, +0.73% up 20 cents, or 0.40% to $50.95 a barrel. In precious metals, gold for April delivery GCJ20, -0.01% closed $7.20 higher, or 0.5% at $1,570 an ounce.
The U.S. dollar DXY, +0.18% was 0.2% higher against a basket of rivals.
In Europe, stocks rose, with the Stoxx Europe 600 SXXP, +0.44% closing 0.4% higher for a record close at 425.49.
Asia’s stocks also advanced, with the China CSI 300 000300, +1.86% adding 1.9%, Japan’s Nikkei 225 NIK, +2.38% rising 2.4% and Hong Kong’s Hang Seng index HSI, +2.64% gaining 2.6%.
Additional reporting by Joy Wiltermuth
https://www.marketwatch.com/story/dow-set-to-join-sp-500-nasdaq-at-records-as-china-says-it-will-slash-tariffs-on-75-billion-in-us-goods-2020-02-06
2020-02-06 21:56:00Z
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