U.S. Stocks Extend Rally as China's Economy Stabilizes
January 17 2020 - 11:18AM
Dow Jones News
By Will Horner and Gunjan Banerji
Global stocks advanced Friday as signs of the Chinese economy
stabilizing and robust earnings from some of the biggest U.S. banks
fueled investors' optimism.
The S&P 500 rose 0.3% shortly after the opening bell, on
track for another new high. The Nasdaq Composite added 0.2%. The
Dow Jones Industrial Average gained 0.2%.
The pan-continental Stoxx Europe 600 gauge rose about 0.9%.
Fresh data showed China's industrial production rebounded last
year, with the 6.9% growth in output in December beating forecasts
and marking the fastest pace of expansion in nine months.
Meanwhile, economic growth slowed to 6.1% last year, largely in
line with market expectations. The Chinese yuan strengthened 0.3%
against the dollar after the data, hitting its highest levels since
July.
While it is too early to tell if the Chinese economic slowdown
has bottomed out, the data added to investors' recent optimism
about the prospects for the global economy following the partial
resolution to the U.S.-China trade dispute, said Geoffrey Yu, head
of the U.K. office for UBS Group's wealth management arm.
"It's a case of looking at it as a glass-half-full, rather than
a glass-half-empty," Mr. Yu said. "There is a general sense that it
could have been a lot worse."
Stocks have advanced to records this week as the U.S. and China
signed a trade deal, putting a pause on a long-simmering battle
between two of the biggest world economies. Additionally, strong
earnings from big banks showed that the domestic consumer remains
strong.
State Street gained 4.5% Friday as the trust bank's profit also
beat Wall Street's expectations.
"Just the general calm down about tariffs has been a big
driver," said JJ Kinahan, chief market strategist at TD
Ameritrade.
Shares of Comcast jumped 0.9% toward a fresh high after it
unveiled its new streaming platform.
In Asia, the Shanghai Composite Index ended the day largely
flat. The fresh economic data has prompted speculation that China's
central bank may hold off on additional stimulus measures, said
Ipek Ozkardeskaya, a senior analyst at Swissquote Bank.
The British pound slipped 0.2% against the dollar after U.K.
retail sales unexpectedly fell in December, further raising
expectations that the Bank of England will cut interest rates when
policy makers meet at the end of the month, said Peter Dixon, an
economist at Commerzbank.
"It's another piece of the jigsaw," Mr. Dixon said of the retail
sales data. "We already had a big miss on November GDP figures and
it now looks like a stretch to assume the U.K. will register
positive growth in the fourth quarter."
Write to Will Horner at William.Horner@wsj.com and Gunjan
Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
January 17, 2020 11:03 ET (16:03 GMT)
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