Stocks Close Higher as Trump Suggests a Trade Deal Is Near
December 12 2019 - 4:39PM
Dow Jones News
By Alexander Osipovich and Caitlin Ostroff
Stocks climbed Thursday after President Trump said on Twitter
that the U.S. and China are nearing a trade deal.
Major indexes jumped after Mr. Trump tweeted, "Getting VERY
close to a BIG DEAL with China. They want it, and so do we!"
The Dow Jones Industrial Average rose 221 points, or 0.8%. The
S&P 500 gained 0.9%, while the Nasdaq Composite advanced
0.7%.
All three indexes hit intraday records after Mr. Trump's tweet,
before paring gains.
The president's comments came ahead of a Sunday deadline when a
fresh round of tariffs are set to go into effect on roughly $156
billion of Chinese goods.
The Wall Street Journal reported Thursday morning that U.S.
negotiators offer to cut existing tariff rates by up to 50% on $360
billion of Chinese imports, citing people familiar with the matter.
The negotiators also offered to cancel the new tariffs set to take
effect Dec. 15, those people said.
The tariffs, which threaten to deepen China's economic problems
and prompt retaliatory action, could weigh on prices of cellphones,
laptops and apparel for American consumers.
Investors sold government bonds in favor of riskier assets after
Mr. Trump's tweet. The yield on the 10-year U.S. Treasury note rose
to 1.904%, from 1.786% on Wednesday. Bond yields move in the
opposite direction from prices.
Gold futures fell 0.2% to $1466.70 a troy ounce. U.S. crude oil
futures gained 0.7% to $59.18 a barrel.
"We're in a waiting pattern, given the looming trade deadline,"
said Jeffrey Kleintop, chief global investment strategist at
Charles Schwab. "The markets are keying off any indication as to
whether we'll get a deal, perhaps more than they should."
The Labor Department said early Thursday that the number of
Americans applying for first-time unemployment benefits jumped to
the highest level in more than two years. The report contrasted
with other recent data showing a strong U.S. jobs market. But
initial jobless claims can be volatile, and jitters over the report
were quickly dispelled by optimism over trade.
Shares of Facebook fell 3.6% after the Journal reported that the
Federal Trade Commission was considering seeking a preliminary
injunction against the social-media company over antitrust
concerns.
Investors were also closely watching the U.K.'s general
election, as voters went to the polls to determine whether Prime
Minister Boris Johnson will remain in office.
The FTSE 100 gained 0.8%, outpacing other European markets,
while the pound fell 0.6% against the dollar.
Politicians in both the major political parties are signaling an
end to years of constrained fiscal policy as the country prepares
to exit from the European Union, and the vote results will play a
crucial role in determining the course of Brexit. Although a
parliamentary majority for the Conservative Party is seen as most
likely, recent polls have shown that Mr. Johnson's lead has
narrowed.
Meanwhile, the European Central Bank under its new President
Christine Lagarde left interest rates unchanged at minus 0.5%, a
day after the U.S. Federal Reserve also held rates steady.
The benchmark Stoxx Europe 600 gained 0.3%. Asian stocks were
mixed, with the Hang Seng rising 1.3% and the Shanghai Composite
Index falling 0.3%.
Write to Alexander Osipovich at alexander.osipovich@dowjones.com
and Caitlin Ostroff at caitlin.ostroff@wsj.com
(END) Dow Jones Newswires
December 12, 2019 16:24 ET (21:24 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.
FTSE 100
Index Chart
From Aug 2024 to Sep 2024
FTSE 100
Index Chart
From Sep 2023 to Sep 2024