U.S. equities finished higher, tacking onto a recent run, courtesy of global trade optimism following yesterday’s signing of a “phase one” U.S.-China agreement and today’s passing of the U.S., Mexico Canada trade agreement (USMCA) by the U.S. Senate. Upbeat economic data also added to sentiment, as retail sales rose solidly, jobless claims dropped and regional manufacturing activity jumped. News on the earnings front was mixed, as Morgan Stanley rallied on its results, but misses from Alcoa and PPG Industries weighed on their respective shares, while Bombardier tumbled after issuing a Q4 warning. Treasury yields, the U.S. dollar and crude oil prices were higher, while gold was lower. Stocks in Europe were mixed, while markets in Asia were mostly higher.
The Dow Jones Industrial Average was up 267 points (0.9%) to 29,298, the S&P 500 Index rose 28 points (0.8%) to 3,317 and the Nasdaq Composite advanced 98 points (1.1%) to 9,357. In moderate volume, 827 million shares were traded on the NYSE and 2.3 billion shares changed hands on the Nasdaq. WTI crude oil gained $0.71 to $58.52 per barrel and wholesale gasoline increased $0.02 to $1.66 per gallon. Elsewhere, the Bloomberg gold spot price fell $3.21 to $1,553.04 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—shed 0.1% to 97.31.
Advance retail sales for December rose 0.3% month-over-month (m/m), matching the Bloomberg forecast and November’s upwardly-revised gain. Last month’s sales ex-autos moved 0.7% higher m/m, compared to expectations of a 0.5% gain and November’s negatively-revised flat reading. Sales ex-autos and gas rose 0.5% m/m, compared to estimates of a 0.4% gain, and November’s flat reading was adjusted to a 0.2% decline. The control group, a figure used to calculate GDP, was up 0.5%, above projections of a 0.4% gain and November’s downwardly-adjusted 0.1% dip.
Weekly initial jobless claims fell by 10,000 to 204,000, versus estimates of 218,000, with the prior week’s figure being unrevised at 214,000. The four-week moving average dropped by 7,750 to 216,250, while continuing claims declined by 37,000 to 1,767,000, north of estimates of 1,750,000.
The Import Price Index rose 0.3% m/m for December, in line with projections, and following November’s downwardly-revised 0.1% gain. Compared to last year, prices increased 0.5%, matching forecasts and versus November’s unrevised 1.3% fall.
The Philly Fed Manufacturing Index in January jumped to 17.0, from the upwardly-revised 2.4 level posted the month prior, versus expectations of a rise to 3.8, moving further into expansion territory (a reading above zero). Growth in new orders, shipments and employment all accelerated in January.
The National Association of Home Builders (NAHB) Housing Market Index showed home builder sentiment in January dipped to 75 from December’s unrevised 76 level, and above estimates calling for 74, with a level of 50 separating good and poor conditions.
Business inventories were down 0.2% m/m in November, matching forecasts, and versus October’s downwardly-adjusted 0.1% increase.
Treasuries were lower, as the yields on the 2-year and 10-year notes rose 2 basis points (bps) to 1.57% and 1.81%, respectively, while the 30-year bond rate ticked 1 bp higher to 2.26%.
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