All three major averages closed at record levels on Thursday, as investors remained upbeat on trade developments and digested corporate earnings reports. The Dow surged 267 points, while the S&P 500 gained 0.8%. A rally in the Tech sector helped push the Nasdaq Composite up 1.1%.
Yesterday, the U.S. and China officially signed the “phase one” trade pact. The agreement was seen as the first step in easing the nearly two-year trade dispute, as it improves intellectual property protections and details a $200 billion increase in Chinese purchases of U.S. goods over two years. Meanwhile, the Senate passed the new U.S.-Mexico-Canada Agreement (USMCA) earlier today, with the trade accord now awaiting President Trump’s signature. On the data front, December U.S. retail sales rose 0.3%, in-line with economists’ projections. The figure excluding autos increased 0.7%, which was the largest uptick in five months. Treasuries weakened with the yield on the benchmark ten-year note up two basis points to 1.80%.
All 11 S&P 500 sectors finished in positive territory, with Technology stocks pacing the gains. In earnings, Morgan Stanley jumped 6.8% after reporting profits and revenue well above analyst forecasts. The Materials group underperformed on a relative basis, with PPG Industries declining 2.7% after the paint supplier released an underwhelming earnings report citing weak industrial markets. Alcoa fell 11.6% after the aluminum maker revealed a larger-than-expected loss. Elsewhere, Signet Jewelers soared more than 40% after reporting upbeat holiday sales.
In commodities, WTI crude added 1.2% to $58.49/barrel. COMEX gold fell 0.1% to $1,553.10/ounce.