US stocks end with good gains

The consumer discretionary, materials, health care and IT led gains

U.S. stocks came off session highs but still closed higher on Wednesday, 12 December 2018 after a series of developments boosted expectations that a U.S.-China trade deal could be reached in the coming months.

The Dow Jones Industrial Average rose 157.03 points, or 0.6%, to end at 24,527.27, while the S&P 500 index advanced 14.29 points, or 0.5%, to 2,651.07. The Nasdaq Composite Index climbed 66.48 points, or 1%, to 7,098.31. The Dow was up more than 450 points at its session high.

The consumer discretionary, materials, health care, communication services and information technology sectors led today's gains.

Both Chinese officials and the Trump administration have made a concerted effort to convince market participants that negotiations will soon bear fruit. President Donald Trump, reportedly said he would intervene in the arrest of Huawei's chief financial officer Meng Wanzhou if it would help ensure a trade deal with China. The executive was granted bail by a Canadian judge on Tuesday after more than a week in detention, but will be subject to close monitoring. She was arrested Dec. 1 at the behest of U.S. authorities and awaits possible extradition to the U.S. where she faces charges related to allegations she lied to banks about the company's ties to a firm that did business in Iran, in violation of U.S. sanctions. Those developments helped spur some relief buying as investors have been carefully watching the arrest, which has angered China, for signs that it could scuttle a trade cease-fire brokered last month.

The ICE U.S. Dollar Index, a gauge of the U.S. currency against major rivals, was off 0.4%, pressured by strength in the British pound as U.K. Prime Minister Theresa May faced a vote of no-confidence Wednesday. A weaker dollar can provide a lift to commodities priced in the unit as it makes them cheaper to users of other currencies.

Reviewing Wednesday's economic data, which included the Consumer Price Index for November and the weekly MBA Mortgage Applications Index, total CPI was unchanged month-over-month in November, as expected, while core CPI, which excludes food and energy, was up 0.2%, also as expected. Total CPI was up 2.2% year-over-year, versus 2.5% in October, and core CPI was up 2.2%, versus 2.1% in October. The key takeaway is that consumer inflation trends are not running away from the Federal Reserve's longer-run target, which should feed into the market's growing belief that the Federal Reserve has some data-based scope to take it easy after a December rate hike. Separately, the weekly MBA Mortgage Applications Index rose 1.6% after increasing 2.0% in the prior week.

Bullion prices ended higher at Comex on Wednesday, 12 December 2018. Gold futures settled higher on Wednesday scoring their first gain in three sessions after data showed U.S. inflation remained flat in November and the dollar took a dip after strengthening over the last two sessions.

Gold for February delivery on Comex rose $2.80, or 0.2%, to settle at $1,250 an ounce, while March silver added 22.3 cents, or 1.5%, to $14.851 an ounce.

Oil prices gave up earlier gains on Wednesday, 12 December 2018 to finish a bit lower, after U.S. government data showed domestic crude supplies declined for a second week in a row, but by much less than the market expected.

The Energy Information Administration reported early Wednesday that U.S. crude supplies fell by 1.2 million barrels for the week ended 7 December 2018. Supplies also declined the week before, marking the first weekly decline in 11 weeks. Market had expected to see a larger decline of 2.8 million barrels in crude supplies.

West Texas Intermediate crude for January delivery fell 50 cents, or 1%, to settle at $51.15 a barrel on the New York Mercantile Exchange. Prices, which touched an intraday high of $52.88, had pared earlier gains shortly after the release of the supply data. Global benchmark February Brent crude shed 5 cents, or less than 0.1%, to $60.15 a barrel on ICE Futures Europe.

Looking ahead, investors will receive Export and Import Prices for November, the Treasury Budget for November, and weekly Initial and Continuing Claims on Thursday.

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