U.S. Stocks Pull Back Off Best Levels But Still Close Higher
(RTTNews) - After sticking to the sidelines in the two previous sessions, traders rushed back into the markets in early trading on Thursday amid signs of progress in U.S.-China trade talks. The major averages reached new record intraday highs but gave back some ground as the day progressed.
Nonetheless, the major averages managed to remain in positive territory, with the Dow and the Nasdaq ending the day at new record closing highs.
The Dow advanced 182.24 points or 0.7 percent to 27,674.80, the Nasdaq climbed 23.89 points or 0.3 percent to 8,434.52 and the S&P 500 rose 8.40 points or 0.3 percent to 3,085.18.
The early strength on Wall Street came after a spokesman for the Chinese Commerce Ministry said the U.S. and China have agreed to lift existing tariffs in phases.
"The trade war started with tariffs and should end with the cancellation of tariffs," said ministry spokesman Gao Feng, who noted phase one of a trade deal must include both countries simultaneously canceling tariffs on each other's goods.
The U.S. has widely been expected to scrap tariffs on about $156 billion worth of Chinese imports currently set to take effect on December 15th as part of phase one.
"Both sides have agreed to cancel additional tariffs in different phases, as both sides make progress in their negotiations," Gao added without providing a timetable.
A report from Reuters said an anonymous U.S. official confirmed the planned rollback as part of a phase one trade agreement President Donald Trump and Chinese President Xi Jinping hope to sign before the end of the year.
However, the Reuters report also noted the prospect of lifting tariffs, even in phases, has drawn fierce opposition from many of Trump's advisers, contributing to a notable pullback by stocks.
In U.S. economic news, the Labor Department released a report showing a bigger than expected decrease in first-time claims for U.S. unemployment benefits in the week ended November 2nd.
The report said initial jobless claims slid to 211,000, a decrease of 8,000 from the previous week's revised level of 219,000.
Economists had expected jobless claims to dip to 215,000 from the 218,000 originally reported for the previous week.
Networking stocks pulled back off their best levels but still ended the day significantly higher, with the NYSE Arca Networking Index jumping by 2 percent.
Within the networking sector, CommScope (COMM) posted a standout gain after reporting better than expected third quarter earnings.
Considerable strength also remained visible among steel stocks, as reflected by the 1.7 percent gain posted by the NYSE Arca Steel Index. The index ended the session at a three-month closing high.
Telecom, oil, and chemical stocks also saw notable strength on the day, while gold stocks showed a substantial move to the downside amid a steep drop by the price of the precious metal.
With gold for December delivery plummeting $26.70 to $1,466.40 an ounce, the NYSE Arca Gold Bugs Index nosedived by 4 percent.
Utilities, tobacco, and housing stocks also came under pressure over the course of the session, partly offsetting the strength seen in the aforementioned sectors.
In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index crept up by 0.1 percent, while Hong Kong's Hang Seng Index rose by 0.6 percent.
The major European markets also moved to the upside on the day. While the German DAX Index advanced by 0.8 percent, the French CAC 40 Index rose by 0.4 percent and the U.K.'s FTSE 100 Index inched up by 0.1 percent.
In the bond market, treasuries moved sharply lower over the course of the trading session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, jumped 11.2 basis points to a three-month closing high of 1.926 percent.
Reports on consumer sentiment and wholesale inventories are due to be released on Friday, although traders are likely to remain focused on news regarding a potential U.S.-China trade deal.
In corporate news, Walt Disney (DIS), Activision Blizzard (ATVI), GoPro (GPRO), News Corp. (NWSA), and Yelp (YELP) are among the companies releasing their quarterly results after the close of today's trading.