Stocks Continue To Run Aided by a Late-Day Trade Report Boost…..
U.S. stocks extended a recent rally despite a noticeable miss from Morgan Stanley. Equities shrugged off the persisting government shutdown, festering Brexit uncertainty and ongoing China concerns, aided by an upbeat jobless claims report and an unexpected jump in regional manufacturing activity. Stocks got a late-day boost from a Wall Street Journal Report that the U.S. was considering lifting Chinese tariffs to hasten a deal. The boost faded somewhat after Treasury officials told CNBC that no China tariffs recommendations were made. Treasury yields finished mostly higher and the U.S. dollar was little changed, while gold and crude oil prices moved lower.
The Dow Jones Industrial Average (DJIA) gained 163 points (0.7%) to 24,370, the S&P 500 Index rose 20 points (0.8%) to 2,636, and the Nasdaq Composite advanced 50 points (0.7%) to 7,084. In moderately-heavy volume, 914 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil lost $0.24 to $52.07 per barrel but wholesale gasoline ticked $0.01 higher to $1.43 per gallon. Elsewhere, the Bloomberg gold spot price declined $1.59 to $1,292.08 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—was little changed at 96.07.
Weekly initial jobless claims decreased by 3,000 to 213,000, below the Bloomberg estimate of 220,000, with the prior week’s figure unrevised at 216,000. The four-week moving average dipped by 1,000 to 220,750, while continuing claims increased by 18,000 to 1,737,000, north of estimates of 1,734,000.
The Philly Fed Manufacturing Index unexpectedly showed growth (a reading above zero) accelerated, rising to 17.0 from 9.4 in December, compared to estimates of a dip to 9.0.
Treasuries were mostly lower, with the yield on the 2-year note rising 3 basis points (bps) to 2.57% and the yield on the10-year note gaining 2 bps to 2.75%, while the 30-year bond rate was flat at 3.07%.
European equities finished mostly lower, weighed down by uncertainty over Brexit after the U.K. government lost its bid to pass an original divorce plan in the House of Commons on Tuesday, but endured a no-confidence vote in Parliament yesterday. Markets seemed to be expecting Westminster to move for an extension of Article 50—pushing back the March 29 Brexit deadline—as the possibility of a general election or a no-deal scenario appeared to fade slightly. Banking stocks came under pressure, giving up some of yesterday’s gains, following a warning regarding a challenging Q4 environment out of the French banking sector. European car shares also fell as U.S. tariff worries persisted and the energy sector saw pressure with crude oil prices trimming a recent run.
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