U.S. Stocks Extend Rally as China's Economy Stabilizes
18 January 2020 - 6:11AM
Dow Jones News
By Will Horner and Gunjan Banerji
U.S. stocks set repeated highs this week, pulled higher by
shares of big technology companies.
The rally coincided with the signing of a trade deal between the
U.S. and China that paused long-simmering battle between two of the
biggest world economies. Meanwhile, earnings from big banks showed
that the domestic consumer remains strong, and fresh economic data
released Friday also added to optimism about the U.S. economy.
The S&P 500 rose 0.2% in recent trading, and the Nasdaq
Composite drifted about 0.1% higher. The Dow Jones Industrial
Average rose 0.1%. All three indexes are on track to close at
records and notch weekly gains of at least 1.7%.
Big technology stocks have been among the biggest gainers of the
week, rising 2.5% in the S&P 500.
"Just the general calm down about tariffs has been a big
driver," said JJ Kinahan, chief market strategist at TD
Ameritrade.
Data on consumer sentiment released Friday suggested that
spending should remain robust in the near term. Meanwhile, fresh
figures on housing showed that construction of new U.S. homes rose
in December to the highest level since 2006.
State Street's stock gained 3% Friday as the trust bank's profit
beat Wall Street's expectations. That report followed strong
numbers earlier in the week from JPMorgan Chase and Morgan Stanley,
among other banks.
Shares of Comcast jumped 1.3% toward a fresh high after it
unveiled its new streaming platform. Investors will be analyzing
more earnings results next week.
On Friday, signs of the Chinese economy stabilizing also fueled
investors' optimism. New data showed China's industrial production
rebounded last year, with the 6.9% growth in output in December
beating forecasts and marking the fastest pace of expansion in nine
months. Meanwhile, economic growth slowed to 6.1% last year,
largely in line with market expectations. The Chinese yuan
strengthened 0.3% against the dollar after the data, hitting its
highest levels since July.
While it is too early to tell if the Chinese economic slowdown
has bottomed out, the data added to investors' recent optimism
about the prospects for the global economy following the partial
resolution to the U.S.-China trade dispute, said Geoffrey Yu, head
of the U.K. office for UBS Group's wealth management arm.
"It's a case of looking at it as a glass-half-full, rather than
a glass-half-empty," Mr. Yu said. "There is a general sense that it
could have been a lot worse."
Elsewhere, the pan-continental Stoxx Europe 600 gauge added 1%,
also hitting a record.
In Asia, the Shanghai Composite Index ended the day largely
flat. The economic data has prompted speculation that China's
central bank may hold off on additional stimulus measures, said
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
Write to Will Horner at William.Horner@wsj.com and Gunjan
Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
January 17, 2020 13:56 ET (18:56 GMT)
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