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U.S. Stocks Move Mostly Higher On Renewed Optimism About Trade Deal

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Extending the strong upward move seen over the course of the previous session, stocks have moved mostly higher in morning trading on Thursday. With the advance, the major averages continue to close in on the record highs set in July.

The major averages have pulled back off their best levels in recent trading but are holding on to gains. The Dow is up 106.01 points or 0.4 percent at 27,243.05, the Nasdaq is up 58.44 points or 0.7 percent at 8,228.12 and the S&P 500 is up 13.18 points or 0.4 percent at 3,014.11.

Stocks initially showed a lack of direction but climbed more firmly into positive territory after a report from Bloomberg News said Trump administration officials have discussed offering an interim trade agreement to China.

Citing five people familiar with the matter, Bloomberg said the limited trade agreement would delay and even roll back some U.S. tariffs for the first time in exchange for Chinese commitments on intellectual property and agricultural purchases.

The people told Bloomberg some of President Donald Trump's top trade advisers have discussed the plan ahead of face-to-face negotiations with Chinese officials in the coming weeks.

The report comes after Trump revealed in a post on Twitter that he is temporarily delaying raising tariffs on $250 billion worth of Chinese imports.

Calling the move a "gesture of good will," Trump delayed raising the tariffs rate from 25 percent to 30 percent from October 1st to October 15th.

Trump said in a separate tweet that China is expected to purchase large amounts of U.S. agricultural products, although the Chinese have not followed through on previous pledges.

Treasury Secretary Steven Mnuchin claimed in an interview with CNBC that Trump could strike a trade deal with China at "any time" but only wants to do a "good deal."

"President Trump is only going to agree to a deal if it's a good deal, a deal that's good for U.S. companies and U.S. workers," Mnuchin said.

Positive sentiment was also generated in reaction to the European Central Bank's monetary policy decision, with the ECB cutting rates and announcing a massive new bond-buying program.

The ECB lowered its main deposit rate by 10 basis points to 0.50 percent and announced plans to restart its quantitative easing program by purchasing assets at a pace of 20 billion euros per month beginning November 1st.

The central bank said it expects to keep interest rates at their present or lower levels until it has seen a sufficient increase in the inflation outlook.

Early buying interest was somewhat subdued, however, as a report from the Labor Department showed the annual rate of core consumer price growth accelerated to an eleven-year high of 2.4 percent in August.

"The further rise in core CPI inflation to an 11-year high of 2.4% in August won't stop the Fed from cutting interest rates again next week," said Andrew Hunter, Senior U.S. Economist at Capital Economics.

He added, "But it does provide further reason to believe that market expectations of significant further easing will ultimately be disappointed."

Gold stocks are turning in some of the market's best performances in morning trading, benefiting from a sharp increase by the price of the precious metal.

With gold for December delivery jumping $10.20 to $1,513.40 an ounce, the NYSE Arca Gold Bugs Index is up by 2.2 percent.

Semiconductor and software stocks are also seeing notable strength on the day, while energy stocks have come under pressure amid a drop by the price of crude oil.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Thursday. Japan's Nikkei 225 Index and China's Shanghai Composite Index both climbed by 0.8 percent, although Hong Kong's Hang Seng Index bucked the uptrend and dipped by 0.3 percent.

The major European markets have also moved to the upside following the ECB announcement. While the U.K.'s FTSE 100 Index has inched up by 0.1 percent, the German DAX Index and the French CAC 40 Index are both up by 0.4 percent.

In the bond market, treasuries have shown a notable downturn over the course of the session after seeing initial strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.8 basis points at 1.751 percent after hitting a low of 1.668 percent.

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