By Sue Chang, MarketWatch , Chris Matthews
Crude oil trims losses on speculation over production cut
Stocks ended higher Friday, with the S&P 500 index and the
Nasdaq notching their best week in nearly seven years, after upbeat
comments from a U.S. trade official who suggested that some sort of
a trade deal is possible during a meeting between President Donald
Trump and Chinese leader Xi Jinping at the G-20 summit in
Argentina.
How did the benchmarks fare?
The S&P 500 index climbed 22.41 points, or 0.8%, to
2,760.17, while the Nasdaq Composite Index gained 57.45 points, or
0.8%, to 7,330.54. The Dow Jones Industrial Average rose 199.62
points, or 0.8%, to 25,538.46 after being down by as much as 72
points at the open.
Both the S&P 500 and the Nasdaq logged their best weekly
performance since December 2011 while the blue-chip index posted
its strongest week since November 2016.
Dow S&P 500 Nasdaq
Week +5.2 +4.9 +5.6
November +1.7 +1.8 +0.3
Year to date +3.3 +3.2 +6.2
What drove the market?
Trade representative Robert Lighthizer told reporters at the
Group of 20 confab that he would be "very surprised" if the dinner
between Trump and Xi "was not a success
(http://www.marketwatch.com/story/as-lighthizer-predicts-trump-xi-dinner-to-be-a-success-heres-what-such-an-outcome-might-look-like-2018-11-30)."
The Wall Street Journal also reported that China could resume
buying U.S. farm and energy products if the U.S. defer a scheduled
increase in tariffs on Chinese products.
In contrast to the protracted standoff between the U.S. and
China, leaders of all three North American nations on Friday signed
the new U.S.-Mexico-Canada Agreement, meant to replace the Nafta
pact that has governed North American trade for more than 20 years.
The agreement still needs to be approved by the three countries
legislatures before the deal can take effect.
Investors are hopeful that the U.S.-China trade negotiations
will be resolved in a similar way as the U.S.-China-Mexico pact,
which was agreed to only after the president issued a series of
tough statements, and engaged in significant brinkmanship, before
finally compromising on a deal at the 11th hour.
The development on the trade front comes on the heels of a week
of speeches by Federal Reserve officials who appeared to have toned
down their stance on the monetary policy. Investors had been
fearful that the central bank will raise rates aggressively in 2019
after a widely expected 25 basis-point hike in December.
Read: How a looming S&P 500 death cross could chase away the
stock market's Santa rally
(http://www.marketwatch.com/story/how-a-looming-sp-500-death-cross-could-chase-away-the-stock-markets-santa-rally-2018-11-29)
What Fed speakers and data were on tap?
New York Fed President John Williams said that the Federal
Reserve is undergoing a strategic review
(http://www.marketwatch.com/story/feds-williams-says-strategy-review-focused-on-problem-of-too-low-inflation-2018-11-30)
of its interest-rate policy, which could lead to the central bank
tolerating higher inflation rates than it is current 2% target.
The MNI Chicago business barometer jumped 8 points to 66.4 in
November to a 4 1/2 year high
(http://www.marketwatch.com/story/businesses-in-chicago-region-grow-at-fastest-pace-in-4-12-years-survey-shows-2018-11-30),
ending a streak of three straight declines. The survey is often
seen as a bellwether for the broader U.S. economy.
What were strategists saying?
Randy Frederick, vice president of trading and derivatives at
Schwab Center for Financial Research, credited much of the market's
gains to positive vibes from the Group of 20 summit.
"President Trump has been seen smiling in many photo ops, and
the expectations bar seems to be rising for his dinner tomorrow
night with Chinese President Xi Jinping."
Tom Essaye, president of the Sevens Report, said in a note to
clients that the market is expecting a "trade war truce" to result
from this weekend's trade talks, in which "Trump and Xi agree to
freeze tariffs at current levels, and begin a multimonth
negotiating period aimed at a comprehensive deal."
If the truce doesn't materialize, however, and signals emerge
that current 10% tariffs on $250 billion in Chinese imports will be
raised in January, Essaye predicts a significant selloff. "We'd
likely see the post Powell bounce erased, and depending on what
happens with Italy and the EU, a serious test of support at 2,600
for the S&P 500 before year-end," he wrote.
Read:Why economists insist Powell wasn't as dovish as the market
thinks
(http://www.marketwatch.com/story/why-economists-insist-powell-wasnt-as-dovish-as-market-thinks-2018-11-28)
See:Did Fed's Powell 'light the fuse' for a year-end
stock-market rally?
(http://www.marketwatch.com/story/did-feds-powell-light-the-fuse-for-a-year-end-stock-market-rally-2018-11-28)
Which stocks were in focus?
Shares of Marriott International Inc. (MAR) slid 5.6% after the
hotel management company said that it encountered a data breach
(http://www.marketwatch.com/story/marriott-says-up-to-500-million-guests-affected-by-starwood-data-breach-2018-11-30)
affecting hundreds of millions of its customers.
GameStop Corp. (GME) tumbled 6.6% after the company issued weak
full-year guidance
(http://www.marketwatch.com/story/gamestop-is-lost-at-sea-and-its-rosy-outlook-is-setting-it-up-for-failure-analyst-says-2018-11-30)for
2018. The stock is down 26% on the year.
Workday Inc. (WDAY) shares rallied 13% following a third-quarter
earnings report that beat Wall Street expectations
(http://www.marketwatch.com/story/workday-stock-gains-after-earnings-revenue-beat-expectations-2018-11-29).
These beats helped convince Stifel Nicolaus to raise its price
target for the stock from $150 to $160.
Shares of Laboratory Corp. of America Holdings(LH) slumped 10%
after the company cut it is full-year 2018 guidance
(http://www.marketwatch.com/story/labcorp-shares-slide-4-premarket-after-company-lowers-full-year-guidance-2018-11-30).
PVH Corp. (PVH) stock rose 0.7% after the Calvin Klein parent
company reported third-quarter earnings above analysts estimates
and raised its full-year 2018 guidance.
Shares of Goldman Sachs(GS) fell 2.1% after reports
(https://www.bloomberg.com/news/articles/2018-11-30/goldman-sachs-slides-with-fresh-1mdb-worries-bofaml-downgrade?utm_content=markets&utm_medium=social&utm_source=twitter&cmpid%3D=socialflow-twitter-markets&utm_campaign=socialflow-organic)
that the Federal Reserve is intensifying its investigation into the
bank's relationship with the 1MBD sovereign-wealth fund. The news
comes as Bank of America downgraded the stock
(http://www.marketwatch.com/story/goldman-sachss-stock-falls-after-bofa-merrill-cuts-rating-slashes-price-target-2018-11-30),
citing uncertainty surrounding the scandal.
How were other markets trading?
Asian stocks were mostly higher
(http://www.marketwatch.com/story/asian-markets-subdued-but-higher-ahead-of-us-china-trade-talks-2018-11-29)
with Japan's Nikkei gaining 0.4%, while Hong Kong's Hang Seng Index
advanced 0.2% and the Shanghai Composite Index rose 0.8%.
European markets were broadly lower with the Stoxx Europe 600
finishing weaker.
Crude oil ended down 1%
(http://www.marketwatch.com/story/oil-slips-back-toward-50-ahead-of-looming-g-20-opec-production-talks-2018-11-30)
but trimmed much of its earlier losses on speculation over a
production cut among big producers. For the month, January West
Texas Intermediate declined 22%. Gold prices settled lower while
the dollar gained
(http://www.marketwatch.com/story/dollar-strengthens-as-g-20-summit-kicks-off-2018-11-30).
--Mark DeCambre contributed to this report
(END) Dow Jones Newswires
December 11, 2018 16:34 ET (21:34 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.