U.S. Stocks Rise as China's Economy Shows Gains
December 16 2019 - 11:26AM
Dow Jones News
By Avantika Chilkoti
Global 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.
The Dow Jones Industrial Average climbed 188 points, or 0.7%, to
28324, while the S&P 500 added 0.9%. The Nasdaq Composite rose
1.1.%. All three indexes hit intraday records.
Overseas, the Stoxx Europe 600 index gained 1.5% to reach a new
high, and 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.
The yield on the 10-year Treasury note rose to 1.870%, from
1.820% on Friday, as investors sold U.S. government debt in favor
of riskier assets. Bond yields rise as prices fall. U.S. oil
futures climbed 0.4%, building on gains from the trade deal last
week. Gold futures slipped 0.1%.
In corporate news, shares of Boeing declined 3.1%. 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 7.4% 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 0.5%.
In the U.K., the FTSE 100 index rose 2.5%, putting it on track
for its largest one-day rally in more than three years. The gauge
is extending gains from last week following Prime Minister Boris
Johnson's resounding win in the general election. The result paves
the way for the U.K. to leave the European Union next month,
clearing some of the political uncertainty that has hung over the
country's 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.
The pound edged up 0.1% against the U.S. dollar.
Alexander Osipovich contributed to this article.
Write to Avantika Chilkoti at Avantika.Chilkoti@wsj.com
(END) Dow Jones Newswires
December 16, 2019 11:11 ET (16:11 GMT)
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