Stock Market News for Dec 23, 2019

Wall Street closed sharply higher on Friday, buoyed by positive development on trade war front and strong economic data. All three major stock indexes closed in the green and achieved fresh record highs. For the week also, these indexes ended in positive territory.

The Dow Jones Industrial Average (DJI) gained 0.3% to close at 28,455.09. The S&P 500 advanced 0.5% to close at 3,221.23. Meanwhile, the Nasdaq Composite Index closed at 8,924.96, climbing 0.4%. The fear-gauge CBOE Volatility Index (VIX) increased 0.1% to close at 12.51. A total of 11.53 billion shares were traded Friday, higher than the last 20-session average of 6.8 billion. Advancers outnumbered advancers on the NYSE 1.6-to-1 ratio. On Nasdaq, a 1.39-to-1 ratio favored advancing issues.   

How Did The Benchmarks Perform?

The Dow closed in positive territory with 22 components of the 30-stock blue-chip index closing in the green while 8 ended in red. Within the Dow, Verizon Communications Inc. VZ with a Zacks Rank of #3 (Hold) gained 2.1%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-laden Nasdaq Composite also ended in the positive territory for the eight straight days due to strong performance of tech stocks. The S&P 500 also finished in the green. The Health Care Select Sector SPDR (XLV) gained 0.3%. Notably, eight out of 11 sectors of the benchmark index closed in the red while three finished in the green.

Positive Development on Trade War Front

On Dec 20, President Donald Trump said that he had a “very good talk” with Chinese leader Xi Jinping and that a formal signing of a partial U.S.-China trade deal is being arranged. On Dec 13, both the United States and China declared that they have reached a phase-one trade deal likely to be signed by the two presidents in the first half of January.

U.S. Trade Representative Robert Lighthizer said the deal will address intellectual-property disputes along with strong enforcement provisions and financial services and currency issues in addition to tariff rollback and higher agricultural purchase.

Strong Economic Data

On Dec 20, the Department of Commerce reaffirmed that the U.S. economy grew 2.1% in the third quarter of 2019. Notably, consumer spending, which constitutes 70% of the country’s GDP grew 3.2% in the third quarter, revised upward from 2.9% reported earlier. Consumer spending increased 0.4% in November, reflecting its fastest pace in four months.

Personal consumption expenditure (PCE) index grew 0.2% in November. Year over year, PCE index grew 1.5%. Core PCE inflation – Fed’s favorite gauge of measuring inflation -- grew 0.1% in November. Core PCE inflation rose 1.6% year over year, well below Fed’s target rate of 2%.

More importantly, business investment decreased 2.3% in the third quarter, instead of a drop of 2.7% as previously reported.Investment in structures fell 2.3% as against the prior estimate of 2.7%. Spending on equipment declined 9.9% from against 12% reported earlier.

Weekly Roundup

Last week was a fabulous one for Wall Street. The Dow, the S&P 500 and the Nasdaq Composite gained 1.2%, 1.5% and 2.1%, respectively. Possibility of the signing of a phase-one trade deal between the United States and China and strong economic data were primary drivers.

Stocks That Made Headline

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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