Dow Rises More Than 150 Points on Growing Optimism Over US-China Trade Talks
Category: Trade
(CNBC) – Stocks rose on Friday as investors cheered potential progress in trade negotiations between China and the U.S.
The Dow Jones Industrial Average rose 162 points at the open, led by gains in Chevron and Boeing. The S&P 500 climbed 0.5 percent, trading out of correction territory, as the energy, tech and industrials sectors outperformed. The Nasdaq Composite advanced 0.6 percent.
On Thursday, the Wall Street Journal reported that Treasury Secretary Steven Mnuchin had floated the idea of easing tariffs on Chinese goods as the two countries continue to negotiate on trade.
The report sent the major indexes to their session highs on Thursday. However, a senior administration told CNBC that there is “no discussion of lifting tariffs now.”
“That’s the key factor,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. “If we don’t get that issue resolved, the market going to hit upside headwinds no matter what happens.”
“If we get that issue out of the way, which will boost business and consumer confidence, there is still plenty of room for the market to do really well,” said Frederick.
Stocks also rose following comments from New York Federal Reserve President John Williams. Williams called for “patience and good judgment ” before raising rates, adding he expects “strong” and “healthy” economic growth for this year.
Manufacturing data released by the Fed also showed the sector’s biggest gain in 10 months in December. Those numbers were boosted by strong production in motor vehicles and other goods.
The major indexes were on track to post their fourth-straight week of gains. They were all up more than 1 percent for the week entering Friday’s session.
The gains come as the corporate earnings season kicks off. Major banks like J.P. Morgan Chase, Bank of America, Morgan Stanley and Goldman Sachs all released their quarterly results this week.
Most recently, Netflix reported better-than-expected earnings, boosted by stronger-than-forecast subscriber growth. However, the stock fell 1.8 percent on the back of disappointing guidance for the first quarter of 2019.
Dow member American Express also fell after reporting disappointing earnings.
