Wall Street steadies as U.S., China announce trade deal

By Lewis Krauskopf (Reuters) - The S&P 500 and the Dow industrials were little changed on Friday after hitting record highs earlier in the session, as the United States and China announced an initial trade agreement, cooling tensions that have rattled markets.

Reuters December 14, 2019 02:06:57 IST
Wall Street steadies as U.S., China announce trade deal

Wall Street steadies as US China announce trade deal

By Lewis Krauskopf

(Reuters) - The S&P 500 and the Dow industrials were little changed on Friday after hitting record highs earlier in the session, as the United States and China announced an initial trade agreement, cooling tensions that have rattled markets.

The S&P 500 technology sector <.SPLRCT> and the tech-heavy Nasdaq <.IXIC> were solidly in positive territory, with gains in Apple Inc providing a boost.

Trading was choppy following announcement of the agreement, which reduces some U.S. tariffs in exchange for increased Chinese purchases of American farm goods. The U.S. has agreed to suspend tariffs on $160 billion in Chinese goods that were due to take effect on Dec. 15, a deadline that had been closely watched by investors.

"The risk of trade (dispute) escalation has been averted for now, and that's a positive," said Sunitha Thomas, regional portfolio advisor at Northern Trust Wealth Management in Chicago.

Investors were also digesting Prime Minister Boris Johnson's commanding victory in the British election, which could bring more clarity to the country's planned exit from the European Union.

"We got confirmation today that two major risks that have been weighing on the market all year have been lifted, for now at least," Thomas said.

"The market is not up more because we have had some of the rally coming into it, and I think there is now a recognition that there needs to be policy follow through on the negotiation of Brexit and also what really the details of this deal between China and the U.S. are," Thomas said.

The Dow Jones Industrial Average <.DJI> rose 9.15 points, or 0.03%, to 28,141.2, the S&P 500 <.SPX> gained 1.68 points, or 0.05%, to 3,170.25 and the Nasdaq Composite <.IXIC> added 22.07 points, or 0.25%, to 8,739.39.

Utilities <.SPLRCU> led gains among the S&P 500 sectors along with tech, while energy <.SPNY> and materials <.SPLRCM> lagged.

Improving sentiment about trade tensions, interest rate cuts from the U.S. Federal Reserve and encouraging economic data have fuelled records for the major U.S. stock indexes. The benchmark S&P 500 has gained 26% so far in 2019.

Earlier this week, the Fed signalled borrowing costs will not change anytime soon.

In company news, Adobe Inc shares rose 4.5% after it beat Wall Street estimates for fourth-quarter revenue and profit.

Broadcom Inc shares dropped 4.1% after the company provided a lukewarm revenue forecast for 2020.

Advancing issues outnumbered declining ones on the NYSE by a 1.07-to-1 ratio; on Nasdaq, a 1.20-to-1 ratio favoured decliners.

The S&P 500 posted 75 new 52-week highs and 1 new low; the Nasdaq Composite recorded 105 new highs and 40 new lows.

(Additional reporting by Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva, Maju Samuel and Bill Berkrot)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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