The major averages extended gains Thursday as positive trade developments and better than expected economic updates boosted investor sentiment. According to the Chinese Ministry of Commerce, the United States and Beijing reached an agreement to hold in person negotiations in October. The Dow advanced 372 points, while the S&P 500 gained 1.3%. The Nasdaq Composite climbed by 1.8%.
On the data front, the ADP employment report showed that 195,000 jobs were added in the month of August, topping expectations of 148,000. Initial jobless claims rose slightly to 217,000 in the most recent week, while the prior period was upwardly revised to 216,000. Separately, ISM’s gauge of service sector activity came in at 56.4 for August, above consensus estimates of 54.0 and the prior months’ 53.7 figure. Treasuries weakened along the curve with the yield on the benchmark 10-year note climbing 10 basis points to 1.56%. On the short end of the curve, the yield on the two-year note jumped 11 basis points 1.54%.
Eight of 11 S&P 500 sectors finished in positive territory with Technology shares pacing the gains. Financials and Industrials also outperformed as the groups added 1.9% and 1.8% respectively. The perceived “defensive” Utilities, Consumer Staples, and Real Estate sectors were the laggards. In M&A news, CVS advanced 1.8% after a judge ruled in favor of allowing healthcare company to acquire insurer Aetna. In commodities, WTI crude finished essentially unchanged after a bigger-than-expected U.S. inventory build-up wiped out strong early session gains. COMEX gold slipped 2.2% to $1519.20/ounce, its worst session since June 2018.