U.S. Stocks Rise as China's Economy Shows Gains
December 16 2019 - 10:02AM
Dow Jones News
By Avantika Chilkoti
Stocks started the week higher as data signaled an improvement
in the Chinese economy, adding to optimism that some of the biggest
risks to markets are clearing.
In the U.S., the Dow Jones Industrial Average rose 0.3% in early
Monday trading, while S&P 500 picked up 0.6% and the tech-heavy
Nasdaq Composite Index added 0.7%. Earlier, the Stoxx Europe 600
index gained 1.3% to reach an all-time high. In Asia, the Shanghai
Composite Index closed up 0.6%.
Fresh data showed that Chinese economic activity, including
factory production and consumer spending, improved in November. The
better-than-expected results may help alleviate investors' concerns
about growth in the world's second-largest economy.
Markets were buoyed last week as some of the major risks facing
global economic growth -- the U.S.-China trade spat, changes to the
North American Free Trade Agreement and uncertainty around Brexit
-- appeared to ease. On Friday, the U.S. reached a truce with China
after securing a pledge from Beijing to boost purchases of
agricultural products, bringing a temporary halt to tensions that
have rocked markets for most of this year.
"Unless we get any bad data I think the market is going to
continue to ride because this was a big, big hurdle cleared for
markets with this 'phase one' deal," said Esty Dwek, head of global
market strategy at Natixis Investment Managers, adding that
earnings expectations for 2020 are now turning sunnier too.
Ahead of the opening bell in New York, shares in Boeing declined
4%. The aerospace company is considering either suspending or
cutting back production of the 737 MAX, The Wall Street Journal
reported. Deepening production cuts would inflate Boeing's costs
and trigger charges against its financial results as fixed expenses
would be spread among fewer planes.
International Flavors & Fragrances fell 4.8% in premarket
trading after DuPont de Nemours reached a deal to combine its
nutrition business with IFF in a deal that will give DuPont a $7.3
billion cash payment and about 55.4% of the new company. Shares in
DuPont gained almost 5%.
Over in the U.K., the FTSE 100 index, which tracks the biggest
companies in the country, rose over 2% in its largest one-day rally
since February. The gauge is extending gains from last week
following Prime Minister Boris Johnson's resounding majority in the
general elections. The result, analysts said, paves the way for the
U.K. to leave the bloc at the end of next month, clearing some of
the political uncertainty that has hung over the economy since the
2016 Brexit referendum.
"It takes the risk of a no-deal Brexit immediately off the table
and it gives you some certainty, so that's better than where we
were," said Thomas Pugh, U.K. economist at Capital Economics.
Within European equities, shares in Electrolux dropped over 10%
after the Swedish appliance maker announced that a reorganization
of its manufacturing in the U.S. will hit fourth-quarter operating
income.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
December 16, 2019 09:47 ET (14:47 GMT)
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