Stocks open broadly higher on Wall Street, adding to gains
NEW YORK (AP) — Stocks are off to a bullish start on Wall Street as traders welcome some good company earnings reports and a solid increase in retail sales last month. Morgan Stanley jumped 7.2% in early trading Thursday after reporting a big jump in earnings in the fourth quarter. Technology companies were also posting gains. Safe-play sectors like real estate lagged the rest of the market. The S&P 500 rose 17 points, or 0.5%, to 3,306. The Dow Jones Industrial Average added 155 points, or 0.5%, to 29,182. The Nasdaq rose 60 points, or 0.7%, to 9,319. Bond prices fell, sending yields higher.
THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.
Global markets were subdued Thursday after the signing of a preliminary China-U.S. trade agreement that investors hope will bring better relations between the world’s two biggest economies.
After Asian markets largely closed higher, Germany’s DAX was down 0.1% to 13,418. The CAC 40 in Paris shed 0.1% to 6,027, while Britain’s FTSE 100 dropped 0.4% to 7,609.
Wall Street looked set for small gains, with the future contracts for the S&P 500 and the Dow both rising 0.3%.
U.S. President Donald Trump and China’s chief negotiator, Liu He, signed the “Phase 1″ deal on Wednesday before a group of corporate executives and reporters at the White House. The pact eases some sanctions on China. In return, Beijing has agreed to step up its purchases of U.S. farm products and other goods.
The agreement helped propel the Dow Jones Industrial Average closed above 29,000 points for the first time and the S&P 500 index hit its second record high in three days Wednesday.
The deal done, traders will likely shift their attention elsewhere. China releases an update on its economic growth on Friday. But skepticism over the long-term prospects for resolving key issues remains, analysts said.
In Asia, earlier, Japan’s Nikkei 225 added less than 0.1% to close at 23,933.13, while the Kospi in South Korea added 0.8% to 2,248.05. Shares fell in China, with the Shanghai Composite index giving up 0.5% to 3,074.08. In Hong Kong, the Hang Seng picked up 0.4% to 28,883.04.
In Australia, the S&P ASX/200 climbed 0.7% to 7,041.80 to a fresh new high, on optimism over the trade deal.
Although it’s limited in scope, investors have welcomed the U.S.-China deal in hopes that it will prevent a further escalation in the 18-month long trade conflict that has slowed global growth, hurt American manufacturers and weighed on the Chinese economy.
Now, Beijing and Washington have to deal with more contentious trade issues as negotiations move ahead. Punitive tariffs will remain on about $360 billion in Chinese goods as talks continue.
“Despite some negative spin-doctoring this morning, it’s hard to argue that the deal marks a significant step in ending the frictions that have cast a dark cloud over global economic growth,” Stephen Innes of AxiTrader said in a commentary.
With the “Phase 1” agreement a done deal, investors have more reason to focus on the rollout of corporate earnings reports over the next few weeks. Earnings have been flat to down for the last three quarters, and if the fourth quarter meets expectations, it should be around the same.
However, analysts are projecting 2020 corporate earnings growth in the U.S. to jump around 9.5%, which is why traders will be listening this earnings reporting season for any clues management teams give about their business prospects in coming months.
In other trading, benchmark crude oil fell 23 cents to $57.58 per barrel in electronic trading after the International Energy Agency said that production from non-OPEC countries would increase this year by more than demand. Brent crude oil, the international standard, fell 7 cents to $63.93 per barrel.
The dollar rose to 109.98 Japanese yen from 109.93 yen on Tuesday. The euro strengthened to $1.1165 from $1.1151.