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U.S. Stocks Seeing Volatility As Traders Digest Details Of Trade Deal

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Stocks have seen considerable volatility over the course of morning trading on Friday as traders react to the latest headlines regarding a U.S.-China trade deal. The major averages have spent the morning bouncing back and forth across the unchanged line.

Currently, the major averages are turning in a mixed performance. While the Nasdaq is up 12.33 points or 0.1 percent at 8,729.65, the Dow is down 5.46 points or less than a tenth of a percent at 28,126.59 and the S&P 500 is down 2.81 points or 0.1 percent at 3,165.76.

The choppy trading on Wall Street comes after Chinese officials confirmed that the U.S. and China have reached an agreement on text of a phase one trade deal.

As part of the agreement, the U.S. will not go through with the threatened tariffs set to take effect on Sunday and begin phasing out existing tariffs.

Reports suggest the tariffs imposed on Chinese goods on September 1st will be cut to 7.5 percent from 15 percent, although the 25 percent tariff on other Chinese goods will remain in place

In return, President Donald Trump said, the Chinese have agreed to many structural changes and massive purchases of U.S. agricultural products, energy, and manufactured goods.

"We will begin negotiations on the Phase Two Deal immediately, rather than waiting until after the 2020 Election. This is an amazing deal for all. Thank you!" Trump said in a post on Twitter.

The phase one deal still needs to go through legal procedures as the U.S. and China move toward officially signing the agreement.

With the focus on trade news, traders do not seem to be paying much attention to a report from the Commerce Department showing U.S. retail sales rose by much less than expected in the month of November.

The Commerce Department said retail sales edged up by 0.2 percent in November after climbing by an upwardly revised 0.4 percent in October.

Economists had expected retail sales to climb by 0.5 percent compared to the 0.3 percent increase originally reported for the previous month.

Excluding an increase in auto sales, retail sales inched up by 0.1 percent in November after rising by 0.3 percent in October. Economists had expected ex-auto sales to increase by 0.4 percent.

Most of the major sectors are showing only modest moves on the day, contributing to the lackluster performance by the broader markets.

Natural gas and steel stocks have moved to the downside, while some strength is visible among tobacco and software stocks.

In overseas trading, stock markets across the Asia-Pacific region moved sharply higher during trading on Friday. Japan's Nikkei 225 Index soared by 2.6 percent, while China's Shanghai Composite Index surged up by 1.8 percent.

The major European markets have also shown strong moves to the upside on the day. While the U.K.'s FTSE 100 Index has jumped by 1.5 percent, the French CAC 40 Index is up by 0.8 percent and the German DAX Index is up by 0.6 percent.

In the bond market, treasuries are regaining ground following the steep drop seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 6.2 basis points at 1.835 percent.

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