Benchmarks closed in the green on Thursday after hitting new record highs as reports on a U.S.-China trade deal lifted investors’ sentiment. Both the S&P 500 and the Nasdaq Composite closed at record highs, while the Dow achieved a new intraday record.
The Dow Jones Industrial Average (DJI) rose 220.75 points or 0.8%, to close at 28,132.05 and the S&P 500 added 26.95 points or 0.9%, to close at of 3,168.58. While, the Nasdaq Composite Index closed at 8,717.32, after rising 63.27 points, or 0.7%.The fear-gauge CBOE Volatility Index (VIX) decreased 7% to close at 13.94. Advancing issues outnumbered declining ones by a 1.69-to-1 ratio on the NYSE and a 1.77-to-1 ratio on the Nasdaq favored advancers.
How Did the Benchmarks Perform?
The rising optimism on the trade front has pushed the S&P 500 and the Nasdaq Composite indexes to close at new record highs. All the three major benchmarks reached intraday records, for the first time since Nov 27.
News of the phase one deal’s progress pushed both the VanEck Vectors Semiconductor ETF (SMH) and iShares PHLX Semiconductor ETF (SOXX) to rise more than 2.5%. Shares of Micron Technology, Inc. (NASDAQ:MU) rose 3.5%.
Rise in Treasury Yield also boosted the bank stocks, the SPDR S&P Bank ETF (NYSE:KBE) rose 2.9%. Shares of JPMorgan Chase & Co. (NYSE:JPM) , a Zacks Rank #3 (Hold) company, rose 2.9% on Thursday.You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Overall, the S&P index recorded 77 new 52-week highs and two new lows. The Nasdaq, however, recorded 169 new highs and 47 new lows.
U.S.-China “Very Close” to Complete Phase One Deal
On Thursday, President Trump tweeted that both the United States and China are nearing a “big deal” that could avoid fresh tariff imposition scheduled on Dec 15 and roll back existing duties. The tweet had send stocks to record levels in midday trading.
Bloomberg further reported that Trump has given the settlement his approval. As per the agreement, the United States will reduce existing tariffs on $360 billion of Chinese goods and delay the 15% tariff imposition scheduled on Dec 15. On the other hand, China has agreed to buy $40 billion worth of agricultural goods in return of the tariff reduction and delay.
However, a Bloomberg’s source reported that “the terms have been agreed but the legal text has not yet been finalized,” an announcement is expected on Dec 13.
Economic Data
Per a report from the Labor Department, on Thursday, initial jobless claims jumped by 49,000 to 252,000 during the week ended Dec 7. In fact, it is at the highest level since September 2017 and came in much higher than the consensus estimate of 214,000.
On the other hand, Producer Price Index came in unchanged, while the Core Producer Price Index rose 0.2% above the consensus estimate of 0.1%. This core producer prices, that strips out volatile energy and food prices, fell to a three-year low of 1.3%
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