Stocks Scrape Record Highs Before Giving up Gains Near Close

Traders work during the opening bell at the New York Stock Exchange on Jan 13 2020

Traders work during the opening bell at the New York Stock Exchange on Jan 13 2020

President Donald Trump and China negotiator Liu He signed the "Phase 1" deal in front of a group of executives and reporters in the White House.

In discussing the trade deal, President Donald Trump said the US and China were "righting the wrongs of the past and delivering a future of economic justice and security for American workers, farmers and families".

The S&P 500 gained 0.19 per cent to 3,289.3, its highest close ever. Up 91 points, the DOW closed at 29,030.

The Nasdaq Composite .IXIC jumped 1.04% to 9,273.93, also a record high. Of those companies, 82% have posted better-than-expected profits. The Russell 2000 picked up 0.4%, to 1,682.40.

Bond prices rose. The yield on the 10-year Treasury note fell to 1.78% from 1.81% late Tuesday.

Meanwhile, a report said that the Trump administration was preparing to propose a rule that would tighten restrictions of US sales of technology to China's Huawei Technologies. The initial agreement is a key step toward de-escalating an 18-month long trade conflict between the world's largest economies. Now, Beijing and Washington have to deal with more contentious trade issues as negotiations move ahead. And punitive tariffs will remain on about $360 billion in Chinese goods as talks continue.

It's earnings season for the biggest American financial institutions, with Morgan Stanley and Bank of New York Mellon Corp. still to come.

"We're expecting a reacceleration in the back end of the year, so any (company) guidance that brings any type of skepticism to that could threaten the recent rally we've had and the gains that we've accrued in the past few months", Buchanan said.

In earnings news this morning, Dow component UnitedHealth (+2.1%), BlackRock (+2%) and Bank of America (-1.8%) beat earnings expectations, while Goldman Sachs (-0.6%) turned in a mixed report. Humana shares climbed 1.9%.

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The technology companies also grew. The sector relies on China for sales and supply chains, and it benefits from better trade relations.

Gold futures gained 0.6% to settle at $1552.10 a troy ounce. Edison International climbed 2.5%.

The Stoxx Europe 600 Index was little changed, while equities across most of Asia fell.

Brent crude oil, the worldwide standard, picked up 41 cents to $64.41 per barrel. Valero Energy lost 3.3%.

USA and European stock futures were largely flat Thursday in wake of the signing of the U.S. The pickup in mortgage applications reflects heightened demand for homes and suggests many people are eager to buy a home now rather than waiting for the traditional late-February start of the spring homebuying season.

Aerospace companies Hexcel Corp HXL.N and Woodward Inc WWD.O jumped 9.6% and 4.8%, respectively, after the two Boeing suppliers said they would combine in an all-stock merger valued at $6.43 billion.

And Target (TGT) lost 6.6% after reporting disappointing holiday same-store sales. Down 0.6%, CL ended the session at $57.91 a barrel. Brent crude, the worldwide standard, fell 49 cents to close at $ 64 a barrel. Wholesale inflation rose only 1.3% in 2019, about half as much as it did in the prior year. Heating oil fell 3 cents to $ 1.88 a gallon.

U.S. Bancorp reported its smallest quarterly profit in two years, pushing its shares down $1.62, or 2.9%, to $54.97.

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