US-China trade optimism lifts Wall Street to record high | Money

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, October 31, 2019. — Reuters pic
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, October 31, 2019. — Reuters pic

NOVEMBER 4 — Technology stocks pushed Wall Street’s three main indexes to record highs today, as hopes of a US-China trade deal and an improving domestic economy boosted risk appetite.

Washington and Beijing said on Friday they had made progress in defusing an economically damaging trade war, with US officials indicating that a deal could be signed this month.

Adding to the upbeat mood, Commerce Secretary Wilbur Ross said yesterday licenses for US companies to sell components to China’s Huawei Technologies Co would come “very shortly”.

Eight of the 11 major S&P 500 sectors were higher, with the energy sector gaining the most as oil prices rose, while technology shares provided the biggest boost on the back of a rally in trade-sensitive chip stocks.

The Philadelphia Semiconductor index touched a fresh record high, with the index last up 1.4 per cent.

“There is growing enthusiasm over a trade deal, as progress is being made in these talks,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

“Investors are betting that some sort of a deal is on its way, not a whole deal but something that will at least avoid a recession. And markets can live with that,” he added.

The third-quarter earnings season has been a key driver for the markets, with 76 per cent of the 360 S&P 500 companies that have reported results so far beating profit expectations, according to Refinitiv data.

Investors also took comfort from data on Friday that showed US jobs growth slowed less than expected in October.

A report today, however, showed new orders for US-made goods fell more than expected in September and business spending on equipment was slightly weaker than initially thought, suggesting that manufacturing remains soft amid the ongoing trade war.

At 10:11 a.m. ET the Dow Jones Industrial Average was up 131.44 points, or 0.48 per cent, at 27,478.80, the S&P 500 was up 13.58 points, or 0.44 per cent, at 3,080.49 and the Nasdaq Composite was up 44.55 points, or 0.53 per cent, at 8,430.95.

The biggest drag on the blue-chip Dow Jones index was a 2.6 per cent drop in shares of McDonald’s Corp after the fast-food giant dismissed Chief Executive Steve Easterbrook over a recent consensual relationship with an employee, which the board determined violated company policy.

Under Armour Inc fell 14.6 per cent as it lowered its full-year revenue forecast for a second straight time, a day after it confirmed a federal probe related to its accounting practices.

In M&A activity, medical device maker Stryker Corp said it would buy smaller rival Wright Medical Group for about US$4 billion in cash. Shares in Wright Medical surged 29.6 per cent, while Stryker fell 4.1 per cent.

Advancing issues outnumbered decliners by a 2.10-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq.

The S&P index recorded 52 new 52-week highs and no new low, while the Nasdaq recorded 101 new highs and 13 new lows. — Reuters

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