US stock indices closed higher on Wednesday afternoon, though key benchmarks ended the day well after President Donald Trump signed the first phase of a trade pact with China that represents a ceasefire ceasefire dispute that has unsettled markets worldwide. broad and slow economic growth.
How did the benchmarks develop?
The Dow Jones Industrial Average
DJIA, + 0.31%
rose 90.55 points or 0.3% to 29,030.22, while the S&P 500 index
SPX, + 0.19%
rose 6.14 points or 0.2% to 3,289.29 while the Nasdaq Composite Index
COMP, + 0.08%
gained 7.37 points or 0.1% and closed at 9,258.70.
All three major benchmarks posted record highs throughout the day, while the Dow and S & P 500 ended the session at record closing levels.
At Wednesday session highs, the Dow rose 187.92 points or 0.6%, the S&P 500 rose 15.51 points or 0.5%, and the Nasdaq Composite rose 47.49 points or 0.5% ,
What drove the market?
Trump and Chinese Deputy Prime Minister Liu Er signed a long-awaited preliminary trade pact in the White House's east room on Wednesday, and investors were encouraged by some details of the deal released by the Trump administration.
The text of the contract contains commitments by the Chinese to increase their purchases of US agricultural, manufacturing and energy products, along with their purchases of services, by more than $ 200 billion over the next two years, even though it states that “the Parties acknowledge this These purchases are made at market prices based on commercial considerations. "
This includes the Chinese’s commitments to enforce intellectual property theft laws and a “bilateral dispute settlement and settlement mechanism” that will encourage the US and China to jointly resolve allegations of patent, copyright, or theft of property intellectual property to work.
During the singing ceremony, President Trump said it was "a lot for both countries" and China's Liu He described the pact as a "landmark deal".
Investors and analysts said the deal was more substantial than many critics of the trade negotiations had expected, with the level of promised Chinese imports of US goods being greater than many expected.
"I think what happens is that people realize that there is plenty of room for additional discussions with China. What is happening today is a really positive step," Wayne Vicker, CIO of Vantagepoint Investment Advisers told MarketWatch.
Stocks ended the day from their highs, however, and Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research, described the action as "classic," referring to "buying the rumor, selling the news, the activity" A tendency for equity investors, in anticipation of good news, to raise stock prices and take profits when it comes to realization.
"This market has been in a robust upward trend since October 11, the day Trump first announced a deal with China," he added. "In this environment with record markets, it is not surprising that we see some caution."
Read: Phase 1 trade deal will not end the market uncertainty, says the HSBC strategist
Investors also watched fourth-quarter corporate earnings continue to grow in the United States and earnings have so far been better than feared. "Less than 10% of the S&P 500 reported, but so far 77% of companies have exceeded earnings estimates, which is slightly better than the historical average," said Michael Arone, chief investment strategist at State Street Global Advisors.
"Expectations have been lowered so much that companies don't have to make a huge effort to exceed them," he added.
In economic data, US wholesale inflation rose 0.1% in December, according to the Department of Labor Producer Price Index, below the 0.2% increase economists had expected from a MarketWatch survey. Compared to the previous year, producer prices only rose by 1.3%, which is roughly half of the 2018 rate.
A survey of New York State manufacturing activity rose 1.5 points to 4.8 in January, exceeding expectations by 3.6, according to Econoday.
On Wednesday afternoon, a survey of the economic situation in various districts of the US Federal Reserve was published, which is known as the "Beige Book". It found that economic activity had expanded "modestly" in the last six weeks of 2019 and that the labor market remained tight as companies found it difficult to identify workers, despite job cuts in the manufacturing, transport and energy sectors.
Which titles were in focus?
Target Corp., shares
On Wednesday, sales fell 6.6% after the retailer saw a 1.4% increase in stores and digital channels for at least 12 months between November 1 and December 31. However, he warned that growth for the full quarter, including January, would likely come in less than half of the 3% to 4% forecast growth.
UnitedHealth Group Inc,
UNH, + 2.83%
On Wednesday, it was reported that fourth-quarter earnings were above Wall Street's expectations, although sales growth was sluggish. The share of the health insurance company rose by 2.8% on Wednesday.
With Dow-component Goldman Sachs Group Inc,
The reported result fell more sharply on Wednesday morning than expected by analysts. The shares of the investment and consumer bank rose by 0.2%.
BLK, + 2.30%
The stock rose 2.3% on Wednesday after quarterly net income rose 40% to $ 1.3 billion. The company's fourth quarter earnings of $ 8.29 per share exceeded analysts' consensus forecasts. Net income of $ 1.2 billion or $ 7.75 per share was expected. The asset manager ended 2019 with $ 7.43 trillion in assets under management, an increase of $ 5.98 trillion exactly a year ago.
Bank of America Corp.,
reported a quarterly profit of $ 6.99 billion in the fourth quarter, compared to $ 7.28 billion a year earlier. Earnings per share were 74 cents, more than the 68 cents forecast by the analysts interviewed by FactSet. The bank generated sales of $ 22.35 billion after $ 22.68 billion. Analysts had expected $ 22.22 billion. Shares fell 1.8% on Wednesday.
Emagazine.credit-suisse.com/app/art…7805 & lang = DE Shares were in focus after President Trump asked the company to "step on the ground" and help the US authorities by Unlocked phones used by "killers, drug dealers, and other violent criminal elements" a Tuesday evening tweet, The company's share closed 0.4%.
How did other markets act?
The yield curve flattened for a second day, with the yield on the 10-year Treasury statement
TMUBMUSD10Y, + 0.44%
The decline of 2.9 basis points to 1.788% and that of the closely observed 3-month treasury bills
Increased by 1 basis point to 1.567%.
The oil price fell on Wednesday when West Texas Intermediate Crude Oil for February
CLG20, + 0.61%
lost 42 cents or 0.7% and traded at $ 57.81 a barrel on the New York Mercantile Exchange. For precious metals, the price of an ounce of gold for delivery in February
GCG20, + 0.19%
increased $ 9.40, or 0.6%, to $ 1,554 an ounce at Comex.
The US dollar fell 0.2% against a basket of its competing currencies, according to the US dollar index
In Europe, the shares closed practically unchanged with the Stoxx Europe 600
SXXP, + 0.01%
The session ended at 419.63, although the UK's FTSE 100
UKX, + 0.27%
In Asia stocks such as the China CSI 300 were sold overnight
fell 0.6%, the Japanese Nikkei 225
NIK, + 0.14%
fell 0.5% and Hong Kong's Hang Seng Index
HSI, + 0.44%
fell 0.4% on Wednesday.