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Trade deal hopes, surging health stocks power Wall Street to highs

Stock MarketsNov 15, 2019 04:28PM ET
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© Reuters. Traders work on the floor at the NYSE in New York

By Lewis Krauskopf

(Reuters) - Wall Street's main stock indexes closed at record levels on Friday, fueled by fresh optimism over a potential calming of U.S.-China trade tensions and by big gains in shares of healthcare companies.

The benchmark S&P 500 tallied its sixth straight week of gains, its longest such weekly streak in about two years, while the Dow breached 28,000 for the first time.

White House economic adviser Larry Kudlow said late on Thursday that the United States and China are getting close to a trade agreement, citing what he called very constructive talks with Beijing.

“Today is definitely about optimism surrounding the trade tensions,” said Jason Pride, chief investment officer of private wealth at Glenmede in Philadelphia.

The stock market has climbed recently to record highs, driven by Federal Reserve interest rate cuts, third-quarter earnings topping low expectations and signs that economic growth may be bottoming, while uncertainty over U.S.-China trade relations remains a wild card.

"It’s definitely been a big source of volatility over a fairly long period of time for the markets and stocks in general," Pride said. "To see some sort of resolution of it would probably be a lift to investors and to equity holders because it takes away a big piece of uncertainty in many investors’, and even corporate executives’, minds.”

The Dow Jones Industrial Average (DJI) rose 222.93 points, or 0.8%, to 28,004.89, the S&P 500 (SPX) gained 23.83 points, or 0.77%, to 3,120.46 and the Nasdaq Composite (IXIC) added 61.81 points, or 0.73%, to 8,540.83.

Ten of 11 S&P 500 sectors ended positive. Healthcare (SPXHC) led the way, gaining 2.2% for its biggest one-day percentage rise since January, with UnitedHealth Group (N:UNH) shares surging 5.3% and Pfizer (N:PFE) rising 2.0%.

The gains came as President Donald Trump made an announcement on healthcare price transparency. Regulatory and election risks have contributed to the healthcare sector's underperformance in 2019, said Walter Todd, chief investment officer at Greenwood Capital in South Carolina, noting that perhaps Friday's gains were "a catch-up trade."

Shares of Applied Materials (O:AMAT) soared 9.0% after the chip gear maker forecast first-quarter revenue and profit above Wall Street estimates.

The Philadelphia SE Semiconductor index (SOX) gained 0.9% and hit a record high. Enthusiasm for the group was tempered by a 2.7% decline in Nvidia (O:NVDA) shares following the chipmaker's report.

Data on Friday showed U.S. retail sales rebounded in October, but consumers cut back on purchases of big-ticket household items and clothing, which could temper expectations for a strong holiday shopping season.

Advancing issues outnumbered declining ones on the NYSE by a 1.84-to-1 ratio; on Nasdaq, a 1.50-to-1 ratio favored advancers.

The S&P 500 posted 52 new 52-week highs and one new low; the Nasdaq Composite recorded 121 new highs and 108 new lows.

About 6.5 billion shares changed hands in U.S. exchanges, below the 6.9 billion-share daily average over the last 20 sessions.

Trade deal hopes, surging health stocks power Wall Street to highs
 

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Comments (12)
Timothy Yap
Timothy Yap Nov 15, 2019 9:09PM ET
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China deal is not going to happen, got to push up WS as high as possible for now, this is the insurance!!!
Hank Williams
Hank Williams Nov 15, 2019 5:53PM ET
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So as long as WS keeps playing Goldie locks and there is a consorted effort to over value markets, the air is clean. But who is going to blink first? This trade although will be hyped to the nth degree I believe has shown us all that China is not some third world country. They have been very productive the last 60 years. When you can be productive with a billion people you have to have learned something. Trade is a non event.
Thom Miller
Thom Miller Nov 15, 2019 3:57PM ET
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Trump Strategy: Every few days we’ll lie to the markets about how close we are to a China trade deal. We’ve already been doing this for the better part of a year, and we can keep this sleezy strategy going for another year, even though there us no deal in hand. And then I can get re-elected on totally false pretenses. When is Wall Street going to realize the Donald is lying through his teeth and creating a very shaky house of cards.....? Cards made where? In China, of course. LOL!
Ludovic Raymond
Ludovic Raymond Nov 15, 2019 3:57PM ET
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On point! And in a few years (or months?), a huge financial bubble was formed under Trump administration.. Problem, we exhausted many monetary tools already! Oversimplified scenario maybe, but nonetheless very likely
chip isbell
Chip Nov 15, 2019 3:57PM ET
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"The plane boss, the plane"
George Hotz
George Hotz Nov 15, 2019 3:13PM ET
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One big manipulation..
TA XVCI
TA XVCI Nov 15, 2019 3:13PM ET
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That will bust after they convince the last person to join the bull-run.
Hank Williams
Hank Williams Nov 15, 2019 2:40PM ET
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The decision makers in these banks that put any investment in the Aramco IPO should be strung up if it creates another bail out of the banks.
chip isbell
Chip Nov 15, 2019 2:40PM ET
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They are twisting Mid-East banker arms to make it happen.  And China is interested in getting in on it.  Guess who they will buy oil from?
Michael Angelo
Michael Angelo Nov 15, 2019 1:31PM ET
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Still seems people don't understand that this is a manipulated market, big but real. Decided to move up in September/October there will be no news until the big boys reach the target. News are only marginal because are revise after a move is done. The main driven of this is the FED and how they are greasing the system. But the sudden improvement in investors’ sentiment did indeed come as the Fed reversed its policy of five years, and started to expand its balance sheet again. It did this to restore liquidity to the repo market, where banks raise their short-term funding, and the Fed has protested repeatedly that this is not a return to “QE” asset purchases to boost the economy. protestations, the market has treated it as a turning point.
Hank Williams
Hank Williams Nov 15, 2019 12:51PM ET
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Are we thinking DOW 30,000 by year end?
Anand Krishnan
Anand Krishnan Nov 15, 2019 12:51PM ET
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I think that for that to happen, there has to be enough demand. Pcall has been at its lowest this year. Could it still happen? Maybe. The market is hard to predict. But based on the pcall and the vix, I would say there is a better chance for a correction than a rise.
Thomas Miskiewicz
Thomas Miskiewicz Nov 15, 2019 12:51PM ET
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31,745 to be precise
Howl Jenkins
Howl Jenkins Nov 15, 2019 12:44PM ET
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oohlala we have a call with China today. S&P to 3200 by EOD for sure! Honestly.. Kudlow and Krew think they're being clever by pumping everyday but they're really prepping one of the greatest 'sell the news' events in years.
TA XVCI
TA XVCI Nov 15, 2019 12:44PM ET
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Exactly!!
Thom Miller
Thom Miller Nov 15, 2019 12:42PM ET
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Once again, Larry is making up things only to juice the markets. The China trade talks are no further along than they were under the Reagan adminidtration.
Barani Krishnan
Barani Krishnan Nov 15, 2019 12:42PM ET
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Very pow-der-ful they are, Thom
Ross Dre
Ross Dre Nov 15, 2019 12:42PM ET
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Preach it, Thom!
Anand Krishnan
Anand Krishnan Nov 15, 2019 12:42PM ET
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Also the points of contention they are discussing now, like tech transfer are hard to resolve. So technically speaking, they may be close, but in reality, they may be far off.
Shram Kaan
Shram Kaan Nov 15, 2019 11:21AM ET
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İ cant understand why big banks and companies which ate have a great weighs on market fallow such an non-serious commitments..the market is going to blast ..it coudnt go endless
Hank Williams
Hank Williams Nov 15, 2019 11:18AM ET
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Earnings Power, really! I do not feel like there is a lot of earnings power right now. Maybe if the wealthy did something with all the bail out money and reduced taxes they have received the economy could grow.
Scott Davison
ScottyD76 Nov 15, 2019 11:18AM ET
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The economy could grow? What? It has been growing for over 3 years. Where have you been? The jobs added each quarter are consistently around 200,000. Lowest unemployment in 75 years. The rich are investing in hiring, capital expenditure upgrades, and innovation like we havent seen in our lifetime. The media wont talk about that of course, because the objective of news media ( ABC, CBS, NBC, NPR, CNN, MSNBC, New York Times, Wash Post, etc) is to make Trump look bad. Essentially, any good things happening economically under this administration for the American people is had for the left, so they simply dont report it. Word to the wise, dont listen to the media cuz they are lying.... to all of us.
Pwr Strk
Pwr Strk Nov 15, 2019 9:45AM ET
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bubble trouble
 
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