Stock Market News For Dec 24, 2019

Benchmarks closed in the green on Monday and the S&P 500 and the Nasdaq Composite closed at fresh record highs after investors spur on reports that China will reduce import tariffs on a basket of goods. On the other hand, the Dow got a boost as its top holding Boeing asked its president and CEO Dennis Muilenburg to resign.

The Dow Jones Industrial Average (DJI) rose 96.44 points or 0.3%, to close at 28,551.53 and the S&P 500 added 2.79 points or 0.1%, to close at of 3,224.01. While, the Nasdaq Composite Index closed at 8,945.65, after rising 20.69 points, or 0.2%. All the three major indexes posted record closes. The fear-gauge CBOE Volatility Index (VIX) increased 0.8% to close at 12.6. Advancing issues outnumbered declining ones for a 1.18-to-1 ratio on the NYSE and a 1-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

Gains for Wall Street’s major indices were buoyed by rise in the shares of Boeing (NYSE:BA) . Furthermore, China’s move to slash tariffs boosted the investors’ sentiments. Months of controversies surrounding Boeing’s 737 Max airliner and worldwide grounding of the same had weighed heavily on the Dow throughout the year. In fact, this Dow stalwart has risen only 4.2% so far this year compared to the blue chip index’s rise of 22.3%.

Per reports on Monday, Boeing’s president and CEO Dennis Muilenburg has been asked to vacate his post effective instantly and Chief Financial Officer Greg Smith will serve as interim. On Jan 13, the current Chairman David L. Calhoun will take up the post of president and CEO, of this giant planemaker.

Shares of Boeing, a Zacks Rank #3 (Hold) company, rose 2.9% on Monday. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Meanwhile, the S&P 500 had hit an all-time intraday high for the eighth straight session, yesterday, the U.S.-China phase one deal seem to have fuelled the rise in the broader index. The index is 28.5% up on a year-to-date basis and is set to record it’s best yearly performance since 2013.

Five of the 11 major S&P sectors ended in the positive territory, with technology stocks providing a solid boost as China announced to slash tariffs some high-tech components. Evidently, shares of trade sensitive Apple Inc. (NASDAQ:AAPL) rose 1.6% on Monday.

Overall, the S&P index had recorded 33 new 52-week highs and no new low on Monday, while the Nasdaq recorded 92 new highs and 22 new lows.

China to Cut Import Tariffs on Jan 1

On Monday, a series of event on the U.S.-China trade front lifted investor’s sentiments and boosted benchmarks to close at record highs. In a report, China’s the finance ministry on Monday said that starting Jan 1, China will implement a temporary import tariffs on United States, which is lower than the most-favored-nation tariffs. The new tariff will be levied on more than 850 products ranging from frozen pork and avocado to some types of semiconductors.

Per a statement in the Chinese ministry’s website, the new tariffs will help to “increase imports of products facing a relative domestic shortage, or foreign specialty goods for everyday consumption.” China has been struggling to cope up with the deficit in pork supply after a severe pig disease that affected maximum herds.

As a part of the cut down in tariff, rate for frozen pork will be cut to 8% from the most-favored-nation duty of 12%, and rate for frozen avocado was cut to 7% from the most-favored-nation duty of 30%. While import tariffs on multi-component semiconductors will be cut to zero.

Economic Data

Per a report from the government, on Monday, sales of new homes increased 1.3% in November, to a seasonally-adjusted annual rate of 719,000. However, the number failed to beat the consensus estimate of 730,000. In fact, the October’s figure was revised to 710,000 from the previously reported 733,000. Overall, sales of new home increased in the Northeast by 52.4% and the West by 7.5%. The volume of sales dropped 4.1% in the South.

On the other hand, the government also reported that durable goods order dropped 2% in November, which is the biggest decline since May. The consensus estimate was of 1.4% increase. Moreover, the October’s gain of 0.6% was also revised to a gain of only 0.2%. Orders for defense aircraft and parts plunged 72.7%, while orders for total transportation equipment fell 5.9% in November.

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