U.S. stocks opened higher Wednesday morning as investors took cheer from a report that Beijing and Washington are still working toward a phase one trade deal, offsetting fears of a delay sparked a day earlier by President Donald Trump’s remarks.
What are stocks doing?
The Dow Jones Industrial Average DJIA, +0.77% rose 207 points, 0.8%, to 27,711. The S&P 500 index SPX, +0.76% was 24 points higher, or 0.8%, trading at 3,117. The Nasdaq Composite Index COMP, +0.72% jumped 59 points, or 0.7%, at 8,579.
On Tuesday, the Dow ended 280.23 points lower, down 1%, at 27,502.81, for its biggest one-day drop since Oct. 8. The S&P 500 finished with a loss of 20.67 points, or 0.7%, at 3,093.20, while the Nasdaq retreated 47.34 points, or 0.6%, ending at 8,520.64.
What’s driving the market?
Equity benchmarks in the U.S. bounced after Bloomberg News, citing sources familiar, reported that despite signs of fresh tensions, Beijing and Washington were making progress toward a phase one trade deal. The comments also helped to provide a lift to European benchmarks.
Bloomberg’s report said any partial resolution on trade would be completed before another set of China tariffs kicks in on Dec. 15. The news comes after stocks broadly slumped on Tuesday following a President Trump news conference in London, where he indicated there was “no deadline” when it comes to concluding the nearly two-year-old U.S.-China trade spat. He made those comments at a NATO meeting.
“It still baffles me that investors hang on every Trump statement and tweet,” said Craig Erlam, an analyst with OANDA Europe. “His trade deal optimism changes on a near-daily basis and yet investors are very sensitive to it. It’s probably a reflection of the relative lack of other talking points.”
Read: What a ‘no-deal’ U.S.-China trade scenario would mean for stocks and bonds
Meanwhile, stocks shrugged off a report on private-sector hiring Wednesday morning. Employers added just 67,000 workers in November, payroll processor ADP said, a much weaker reading than analysts had forecast, made worse by downward revisions to earlier months.
Fresh data on the service sector of the U.S. economy is also due Wednesday: the Institute for Supply Management’s nonmanufacturing index is due at 10 a.m.
Also at the same time, Federal Reserve Vice Chairman for Supervision Randal Quarles will testify before the House Financial Services Committee. The hearing is about banking supervision, not monetary policy.
What stocks are in focus?
Expedia Group Inc. EXPE, +8.17% shares skyrocketed more than 7% after a reshuffle of top executives over ongoing disagreements over strategy.
Shares of Tesla Inc. TSLA, -0.29% moved up 0.2% after an analyst upgrade. Citi analysts said shares were likely to hit $222, up from a previous target of $191, but that still implies a hefty decline for the stock, which closed Tuesday at $336.20.
G-111 Apparel Group Ltd. GIII, -9.17% shares fell in premarket hours after the owner of fashion brands like Calvin Klein missed sales expectations and lowered its guidance. The company said tariffs were biting into its business. Shares were flat at the open.
Shares of Campbell’s Soup CPB, +1.95% ticked up after the company reported earnings that were weaker than a year ago and cut its 2020 sales growth guidance.
Investors will also be watching for third-quarter results from Restoration Hardware RH, +1.17%, Slack Technologies, Inc. WORK, -1.51%, and H&R Block Inc., HRB, +0.68% among others.
What are other markets doing?
The yield on the 10-year U.S. Treasury note TMUBMUSD10Y, +2.30% ticked up three basis points to 1.74%.
In commodities markets, the price of a barrel of West Texas Intermediate crude oil CL00, +3.33% rose 3% to $57.79 a barrel on the New York Mercantile Exchange.
Gold for February delivery GCG20, -0.22% fell $2.60, or 0.2%, to $1,481.70 an ounce on Comex.
The U.S. dollar edged, as measured by the ICE U.S. Dollar Index DXY, -0.22%, was down 0.2% at 97.52 against a basket of a half-dozen currency peers.
European stocks were broadly trading higher, with the STOXX Europe SXXP, +0.99% up 1%, to 402.49.
In Asia overnight, the Hang Seng HSI, -1.25% fell 328 points, 1.3%, and the China CSI 000300, -0.03% ticked down 1.3 points to 3,849.82.
Related: Don’t get so excited, this economist says — the trade news isn’t that good
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2019-12-04 14:56:00Z
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