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Stocks - Wall Street Hits New Highs on Trade Deal Reports

Stock MarketsDec 12, 2019 05:08PM ET
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Investing.com - The major stock indexes surged to new intraday highs, and the S&P 500 and Nasdaq Composite indices closed at new records on reports that the United States and China have "an agreement in principle" on a phase one trade deal.

The S&P 500 closed up 0.9% at 3,168.57, breaking the old closing high of 3,153.63, set on Nov. 27. It also hit a new intraday high of 3,176.28. The Nasdaq finished up 0.73% to 8,717.32, after hitting an intraday high of 8,745.82. Both closes broke their old records set on Nov. 27.

The Dow Jones industrials were up 0.79%, or 221 points, to 28,132.05. The blue chips had hit a new intraday peak of 28,224.95 in the morning.

The trade deal, according to Bloomberg News, is expected to include "a significant increase in Chinese agricultural purchases" in exchange for the U.S. delaying a new round of tariffs scheduled to take effect Dec. 15 and as much as a 50% reduction in existing levies.

A final text hadn't been approved.

President Donald Trump tweeted early in the day a deal was near, and stocks took off at the open, with the Dow rising as many as 314 points. The market pulled back, cutting the gains by more than half, and then moved higher as more reports of a deal were published. Bloomberg News said late Thursday Trump has signed off on the deal.

The euphoria pushed at least 206 stocks to new all-time or 52-week highs, including Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), big banks and truck manufacturer PACCAR (NASDAQ:PCAR).

Facebook (NASDAQ:FB) share fell 2.7% on a Wall Street Journal report that the Federal Trade Commission may see a court order halting integrating the company's aps into a seemless group. The FTC thinks that could violate antitrust laws. The decline was the third-worst among Nasdaq 100 stocks.

Twenty-seven of the 30 Dow stocks were higher.

The biggest loser was Boeing (NYSE:BA), down 1%. The company withdrew its guidance it would get its 737 Max jetliner recertified this month and flying again early next year. Instead, the company will follow the lead of the Federal Aviation Administration. FAA administrator Stephen Dickson said Wednesday the approval would not come until next year – and wouldn't put a specific date.

The other decliners were 3M Company (NYSE:MMM) and Procter & Gamble(NYSE:PG).

Bank stocks overall were higher independent of the trade question, with the KBW Bank index rising 2.9%. Helping the group was the New York Federal Reserve Bank's announcement Thursday it will conduct repurchase agreement operations totaling $365 billion to ensure banks have enough liquidity.

That came after Federal Reserve Chairman Jerome Powell's commitment on Wednesday to support the repo market, the lifeblood of banking operations, at least through January. Banks and financial institutions routinely buy and sell securities on a short-term basis to fund their needs.

Oil prices and interest rates moved higher.

West Texas Intermediate crude was up 42 cents to $59.18 a barrel. Brent crude, the global benchmark, rose 48 cents to $64.20.

The 10-Year Treasury yield rose to 1.897% from Wednesday's 1.79%.

Gold fell $2.70 to $1,472.30 an ounce in New York, a reflection of declining trade tensions.

Casino operator Wynn Resorts (NASDAQ:WYNN), which has big operations in Macau, chip maker Advanced Micro Devices (NASDAQ:AMD) and fashion retailers L Brands (NYSE:LB) and Gap (NYSE:GPS) were among the top S&P 500 performers.

Cell-phone infrastructure company SBA Communications (NASDAQ:SBAC), shopping-center developer Regency Centers Corporation (NASDAQ:REG) anfd home builders Lennar (NYSE:LEN) and DR Horton (NYSE:DHI) were among the worst S&P 500 performers on the day.

Stocks - Wall Street Hits New Highs on Trade Deal Reports
 

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Comments (6)
Kenny Venezia
Kenny Venezia Dec 12, 2019 10:28PM ET
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if I read one more headline about Trump tweeting about a great deal is close, I'm going to PUKE
Ron Warren
Ron Warren Dec 12, 2019 7:21PM ET
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The most ridiculous nonsense I've ever seen! Manufacturing has been in a hole. Sept was worst month in 10 years. Tech chip sales way down. Etc. If the trade war gets resolved, we need to get back to where we were. The market has been steadily climbing through the whole war, oblivious to what's going on. Ignorant!!
Anand Krishnan
Anand Krishnan Dec 12, 2019 7:21PM ET
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You are not wrong. I think, now that the tension is over, the metrics you talk about on manufacturing and chips may be looked at a little more closely
The king TD David
the2775kingTD Dec 12, 2019 6:17PM ET
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Robert Cox
Robert Cox Dec 12, 2019 5:33PM ET
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So let me make sure I understand correctly. According to the reports, the US agrees to halt further tariff hikes and possibly roll back current tariffs. In exchange, the Chinese agree to continue negotiating agricultural purchases to possibly be determined at yet a later date.This is little more than another bit of smoke and mirrors. There's no actual substance. But the markets will eat it up like sweet honey...
David David
David9 Dec 12, 2019 5:33PM ET
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The farmers need a deal or else they can't farm. Farming is seasonal, they need one now or lose another year.
Robert Cox
Robert Cox Dec 12, 2019 5:33PM ET
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Farming in the US has little to do with individual farmers. Most is carried out by large corporations and co-ops. But ultimately this is just a headline to build up Trump in the eyes of his supporters.
Heine Pedersen
Heine Pedersen Dec 12, 2019 4:56PM ET
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Wall Street can apparently only survive via their WH puppet. And the FED printing cheap money. Very bad US data today.. And then this. Lots of people lost money today because of this **** Some are gonna pay..
nick bryson
nick bryson Dec 12, 2019 4:23PM ET
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wow trump tweeted. big news. let me know when they're signing this magic deal that has been promised, promoted, and ready to sign since February
 
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