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Market Snapshot: Dow, S&P 500 and Nasdaq surge to new records as market focus shifts to U.S.-China trade

U.S. stock indexes on Thursday hit new records as investors turn to fresh progress on a partial China trade pact, amid apparent easing of Middle East tensions. Read More...

U.S. stocks hit record highs Thursday as investors focused on progress on the trade pact with China due to be signed next week, amid an easing of concerns about war in the Middle East.

How are benchmarks performing?

The Dow Jones Industrial Average DJIA, +0.65% gained 149 points, or 0.5%, to trade around 28,894, while the S&P 500 index SPX, +0.54% traded 12 points, or 0.4%, higher to 3,266. The Nasdaq Composite Index SPX, +0.54% added 36 points to reach 9,166, a gain of 0.4%.

All three benchmarks set new intraday highs Thursday morning.

On Wednesday, the Dow ended the session up 161.41 points, or 0.6%, to 28,745.09, the S&P 500 gained 15.87 points, or 0.5%, to close at 3,253.05, and the Nasdaq Composite Index finished up 60.66 points, or 0.7%, at 9,129.24.

Read: The S&P 500 is now more overvalued than ever, per this measure

What’s driving the market?

China’s top trade negotiator, Vice Premier Liu He, will lead a delegation to Washington next week to sign a phase-one trade deal, The Wall Street Journal reported Thursday, citing China’s Commerce Ministry.

Trade negotiations have been a driver for market moves for more than a year because President Trump’s imposition of import tariffs has slowed global economic growth.

The progress on China trade talks has helped, at least momentarily, to put the threat of conflict between the Washington and Tehran on the back burner after the Islamic Republic late Tuesday launched a missile strike on U.S. military bases in Iraq in retaliation for the killing of one of its top generals last week.

“We’ve had several data points that have provided a bit more clarity, so at the margins investors have some more runway,” said Jack Janasiewicz, portfolio manager at Natixis Advisors, in an interview. “We’ve got the phase-one deal that sounds like it’s going to be signed next week, global growth numbers that have been OK and highly accommodative central banks around the world,” all of which are helping send markets higher, he said.

Moreover, investor sentiment was buoyed by remarks by President Donald Trump on Wednesday who responded to the Iranian attacks by Iran by playing down their importance, saying that no U.S. casualties were sustained and that only ‘minimal’ damage was done to U.S. military facilities in Iraq.

“Yesterday afternoon President Trump issued a statement in relation to Iran, and he made it clear that he wasn’t pushing for an all-out war with the regime, which was a weight off traders’ minds,” wrote David Madden, market analyst at CMC Markets UK, in a daily research note.

In economic data, the number of Americans newly applying for jobless benefits during the seven days ended Jan 4. fell for the fourth week in a row to 214,000.

“The deterioration in business surveys in the spring and summer has not been followed by rising layoffs,” said Ian Shepherdson, chief economist for Pantheon Macroeconomics. “At worst, gross hiring might have dipped a bit, though the strong recent payroll numbers cast doubt even on that idea. Layoffs remain at their lowest, as a share of the workforce, since the data were first collected on their current basis in 1948”

Meanwhile, Federal Reserve Vice Chairman Richard Clarida said Thursday that the economy was in a good place, but stressed that the Fed’s interest-rate policy may be changed at any meeting. Separately, New York Fed President John Williams said the world’s central banks have to prepare for a long stretch of low interest rates.

Richmond Fed President Tom Barkin and Chicago Fed President Charles Evans are also slated to appear later Thursday.

See also: World Bank predicts modest global 2020 rebound, but trade war remains a risk

Which stocks were in focus?

Uber Technologies Inc. UBER, +0.10% introduced changes to its service in California, including giving drivers the ability to reject rides without penalty, while eliminating preset for riders, as it attempts to make a stronger case that its drivers are independent contractors and not employees. Shares were down 0.8%.

Kohl’s Corp. KSS, -8.67%  shares slid 9.3% after the retailer reported declining comparable holiday-season sales.

Bed Bath & Beyond BBBY, -18.50% shares lost about one-fifth of their value after the retailer reported a quarterly loss tied to weaker sales during the holiday period Wednesday evening.

Boeing Co.’s stock BA, +1.61% remained infocus after reports said U.S. officials believe the fatal crash of a Boeing 737-800 aircraft in Iran earlier this week was caused by Iranian missiles, and not from a technical fault. Shares were up 1.8%, reversing Wednesday’s loss.

Macy’s Inc.’s shares M, -3.18% fell nearly 4% after the retailer said it plans to shut nearly 30 locations after its sales fell during the holiday months.

HP Inc. HPQ, +1.17% again spurned a takeover bid by Xerox Holdings Corp. XRX, +1.06%  in a terse letter Wednesday. Shares were up about 1%.

Verizon Communications Inc. VZ, -0.36% is eliminating traditional cable bundles and the handcuffs that often came with them, making it easier for households to switch video packages in the hopes they won’t cut the cord entirely.

How are other markets trading?

Government bond rates were edging higher, with the yield on the 10-year U.S. Treasury note TMUBMUSD10Y, -0.95%  up 1 basis point to 1.88%.

In commodities markets, the price of a barrel of West Texas Intermediate crude oil for February delivery CLG20, +0.13% lost 23 cents, or 0.4% to $59.38. As for precious metals, gold prices were losing ground, with an ounce of gold for February delivery GCG20, -0.31%  declining $8.00, or 0.5% to $1552.20.

The U.S. dollar was edging higher, up 0.1%, according to the ICE U.S. Dollar Index DXY, +0.14%, which tracks the U.S. unit against a basket of six major rivals.

In Asia overnight, stocks rallied. The China CSI 300 000300, +1.27%  gained 1.3%, Japan’s Nikkei 225 NIK, +2.31%  added 2.3% and Hong Kong’s Hang Seng Index HSI, +1.68%  rose 1.7%.

European stocks were higher, with the Stoxx Europe 600 SXXP, +0.31%  closing up 0.4%.

See also: Pound slides as Carney speech highlights possibility of interest-rate cut

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