Business Standard

Trade progress boosts Wall Street at end of rough year


By Shreyashi Sanyal
(Reuters) - U.S. stock indexes jumped on Monday in a broad-based rally driven by growth sectors, as signs of progress in the U.S.-China trade dispute set up Wall Street to end its worst year in a decade on an upbeat note.
U.S. President Donald Trump said he had a "very good call" with China's President Xi Jinping on Saturday to discuss trade and that "big progress" was being made.
"The progress cited by Trump on trade talks and a continuation of last week's rally are lifting investor spirits," Peter Cardillo, chief market economist at Spartan Capital Securities, said in a client note.
The trade-sensitive S&P industrials sector rose 0.87 percent, driven by gains in Caterpillar Inc and Boeing Co, which was the biggest boost to the Dow Industrials.
The technology sector, housing companies that have major exposure to China, rose 0.72 percent, while gains in Inc and Netflix Inc helped send the consumer discretionary sector 1 percent higher.
But the biggest gain was among health stocks, the best performing sector this year, which rose 1.29 percent. The defensive utilities and real estate sectors fell.
Energy stocks, the worst performing sector this year, rose 0.70 percent as the update on the trade front also helped boost crude oil prices.
At 10:00 a.m. ET, the Dow Jones Industrial Average was up 217.52 points, or 0.94 percent, at 23,279.92, the S&P 500 was up 17.15 points, or 0.69 percent, at 2,502.89 and the Nasdaq Composite was up 50.16 points, or 0.76 percent, at 6,634.68.
After the violent swings this month, the last day of trading is expected to be relatively muted with comparatively light volumes ahead of the holiday on Tuesday for New Year's Day.
Last week started with the benchmark S&P 500 and Dow Jones Industrial Average coming within a whisker of a 20 percent decline from their closing high - also known as bear market territory - before rallying after Christmas to end the week higher after three straight weeks of losses.
Still, the S&P 500 down over 9 percent so far in December, was its biggest monthly drop since February 2009 and its worst December since the Great Depression.
The S&P is down over 6 percent this year, while the Dow is down nearly 6 percent, both snapping two-year winning streaks to post their biggest yearly drop since 2008, during the throes of the financial crisis. The Nasdaq has snapped a six-year winning streak to drop about 4 percent this year.
Most of the damage was inflicted in the past three months as worries about Sino-U.S. trade frictions, U.S. interest rate hikes, slowing corporate profit growth, Brexit and the partial U.S. federal government shutdown, entering its 10th day, formed a perfect storm across global financial markets.
Many of these concerns will carry over into 2019, but for this week, the major point of interest will be key U.S. economic reports, including on manufacturing and employment.
On the day, advancing issues outnumbered decliners for a 2.12-to-1 ratio on the NYSE and a 1.70-to-1 ratio on the Nasdaq.
The S&P index recorded no new 52-week highs or lows, while the Nasdaq recorded three new highs and 20 new lows.
(Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

Disclaimer: No Business Standard Journalist was involved in creation of this content

Don't miss the most important news and views of the day. Get them on our Telegram channel

First Published: Dec 31 2018 | 9:01 PM IST

Explore News