Quantcast
Wall Street hits fresh record on trade, earnings optimism - Metro US

Wall Street hits fresh record on trade, earnings optimism

Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., January 13, 2020. REUTERS/Brendan McDermid
By Noel Randewich

By Noel Randewich

(Reuters) – Apple and other tech favorites propelled Wall Street to record highs on Monday, fueled by optimism about the signing of a preliminary U.S.-China trade deal, as well upcoming fourth-quarter earnings reports.

Apple Inc , Facebook Inc , Netflix Inc , Microsoft Corp and Amazon.com Inc , which have powered the longest bull run in U.S. equities, were among the top contributors to intraday record highs hit by the S&P 500 and Nasdaq.

Google-owner Alphabet Inc rose 0.6%, bringing its market capitalization to $991 billion.

An easing of Middle East tensions and the Phase 1 U.S.-China trade agreement, which is expected to be signed in Washington on Wednesday, have encouraged riskier bets over the last week.

“People are optimistic about earnings and they’re also relieved that the Iran situation last week didn’t end up being worse than it was, and people are happy that China and the U.S. are coming together to sign the Phase 1 trade deal. There’s a lot to be optimistic about,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Bloomberg, citing sources, reported that the Trump administration planned to lift its designation of China as a currency manipulator, adding to the positive mood.

Investors are awaiting earnings from big banks JPMorgan Chase & Co , Citigroup Inc and Wells Fargo & Co , which kick off the fourth-quarter reporting season from Tuesday.

Analysts expect profits at S&P 500 companies to drop 0.6% for a second consecutive quarter, according to Refinitiv IBES data.

Many investors, however, are already looking ahead to a potentially rosier earnings outlook once Washington and China resolve their trade dispute.

The S&P 500 and Nasdaq Composite were on track to close at record highs.

At 2:27 p.m. ET, the Dow Jones Industrial Average <.DJI> was up 0.18% at 28,876.29, while the S&P 500 <.SPX> gained 0.55% to 3,283.24.

The Nasdaq Composite <.IXIC> added 0.89% to 9,260.62.

Aerospace companies Hexcel Corp and Woodward Inc jumped 9.3% and 4.7%, respectively, after the two Boeing suppliers said they would combine in an all-stock merger valued at $6.43 billion.

Tesla Inc surged 8.2% after a report that China would not make significant cuts to subsidies for new energy vehicles this year, while Oppenheimer boosted its price target on the stock.

Advancing issues outnumbered declining ones on the NYSE by a 2.34-to-1 ratio; on Nasdaq, a 1.65-to-1 ratio favored advancers.

The S&P 500 posted 59 new 52-week highs and 1 new low; the Nasdaq Composite recorded 136 new highs and 23 new lows.

(Reporting by Noel Randewich; additional reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Dan Grebler)

More from our Sister Sites