Stocks post fourth gain in a row, extending a weeklong rally
Stocks closed higher on Wall Street on Thursday, extending the market’s solid rebound this week and delivering another round of record highs for the major indexes.
The Standard & Poor’s 500 index, Dow Jones industrial average and Nasdaq each hit all-time highs as they extended their winning streak to a fourth day. The S&P 500 rose 11.09 points, or 0.3%, to 3,345.78. The Dow gained 88.92 points, or 0.3%, to 29,379.77. The Nasdaq climbed 63.47 points, or 0.7%, to 9,572,15.
The latest gains came as investors assessed more company earnings reports. China’s decision to cut tariffs on $75 billion of U.S. imports also helped keep investors in a buying mood. The reductions, which follow U.S. tariff cuts last month on Chinese goods, are part of a previously signed phase one trade agreement with Washington.
“It’s certainly good news and something unexpected,” said Sam Stovall, chief investment strategist at CFRA. “The Chinese, in a sense, are showing deference and offering an olive branch to the U.S. ahead of the phase two negotiations.”
Bond prices rose. The yield on the 10-year Treasury slipped to 1.64% from 1.65% late Wednesday.
China’s tariff reductions apply to several categories of U.S. imports, including pork, soybeans and auto parts. The cuts follow the phase one agreement toward ending a long-running tariff war over Beijing’s technology ambitions and trade surplus. Both sides have made conciliatory gestures, but the lingering dispute threatens to chill global economic growth.
Beijing is also promising tax cuts and other help to businesses in a bid to offset the economic blow from the virus outbreak that has put the world’s second-largest economy on lockdown. Companies continue to warn of an expected hit to revenue and profit, though the extent of the damage for many remains unclear.
Worries about the potential global economic fallout from the outbreak spurred a mid-January slump for U.S. stocks. Investors appear to have set aside those concerns this week, focusing instead on encouraging U.S. economic data and company earnings reports.
Cognizant led the gainers in the technology sector Thursday, vaulting 9.9%. The information technology consulting firm’s fourth-quarter earnings topped Wall Street’s expectations.
Twitter surged 15% after the messaging service reported surprisingly good growth for daily users and solid revenue in the fourth quarter. The most recent quarter marks the first time the company’s revenue topped $1 billion. The stock’s gains helped pull the communication services sector higher.
Industrial stocks and household goods makers also rose. Those gains were outweighed by losses in energy stocks, banks and companies that rely on consumer spending.
Traders welcomed solid quarterly results from Coach parent Tapestry. The company, which also owns Kate Spade, warned investors about a potential hit to its sales and profit because of the virus outbreak in China. Its shares rose 2.1%.
Yum Brands fell 2.8% after the operator of Pizza Hut, Taco Bell, and KFC restaurants reported weak fourth-quarter profit. The company also faces financial pain from the virus outbreak. China made up 27% of KFC’s total sales and 17% of Pizza Hut’s sales in the fourth quarter.
Online mattress pioneer Casper Sleep jumped 12.5% in its stock market debut. The company, which was founded in 2014, has expanded beyond online selling, opening 60 Casper stores and selling to 18 retail partners such as Target and Amazon. It has plans to expand to more than 200 stores in North America.
The government will release its closely watched monthly jobs report Friday, along with several other economic indicators. A solid jobs market has been a key factor behind the strong U.S. economy. Economists expect the January jobs report to show more growth and they expect the unemployment to remain stable at 3.5%.
Benchmark crude oil rose 20 cents to $50.95 a barrel. Brent crude oil, the international standard, fell 35 cents to $54.93 a barrel.
Gold rose $7.30 to $1,565.10 an ounce and silver rose 22 cents to $17.79 an ounce.
The dollar rose to 109.97 Japanese yen from 109.83 yen Wednesday. The euro weakened to $1.0995 from $1.0997.
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