Stocks Edge Up as Investors Parse Trade Headlines
December 05 2019 - 4:58PM
Dow Jones News
By Paul J. Davies and Karen Langley
U.S. stocks edged higher Thursday as investors parsed the latest
headlines on the trade dispute with China and looked ahead to
Friday's jobs report.
The S&P 500 rose 0.2% at the 4 p.m. ET close, while the Dow
Jones Industrial Average gained 0.1%, or 28 points. The Nasdaq
Composite inched up less than 0.1%.
Trade-related news has driven markets this week. China again
offered reassurance Thursday on the state of trade talks between
the world's two largest economies, with a spokesman for China's
Commerce Ministry saying the negotiating teams have maintained
close communications.
That followed comments from President Trump who had suggested
earlier in the week that the talks could continue well into next
year, spooking investors and pushing major indexes lower. Mr. Trump
later said the talks were going "very well."
Investors have been watching the negotiations particularly
closely with the approach of the next wave of proposed tariff
increases, which are due to go into effect Dec. 15.
"I think you'll see more volatility around trade war coming up
as this December 15 deadline looms," said Sandy Villere, portfolio
manager at the Villere Balanced Fund.
Mr. Villere said he has watched trade-related market drops for
opportunities to buy particular stocks whose prices have been
pushed down. He said his fund added shares of ON Semiconductor
earlier this year.
Although major U.S. stock indexes have declined so far this
week, they have posted double-digit gains for the year. The S&P
500 has climbed 24% in 2019.
Sébastien Galy, senior macro strategist at Nordea Asset
Management, speculated that by the end of next week, "Trump will be
willing to say that tariff increases are unnecessary because talks
have progressed."
Meanwhile, fresh economic data Thursday showed the number of
Americans applying for first-time unemployment benefits fell last
week, declining to a level lower than that expected by economists
surveyed by The Wall Street Journal.
Investors will closely watch Friday's nonfarm payrolls data for
additional insights into the health of the U.S. jobs market. The
employment figures could turn weaker given the slowdown in
corporate investment spending and the weakening in new job openings
reported earlier this week.
"It's possible we start to see an easing in the jobs market,"
Mr. Galy said.
As broad stock indexes showed muted moves, earnings reports
drove swings in individual stocks. Shares of fashion retailer
Express jumped 26% after it reported third-quarter sales that beat
expectations. Shares of Five Below rose 4.4% after the discount
retailer beat estimates for the third quarter.
Michaels shares fell 13% after the crafts retailer reported a
drop in profit. Shares of Brown-Forman fell 6.4% after the maker of
Jack Daniel's whiskey lowered its guidance for growth in underlying
operating income.
Among the sectors in the S&P 500, materials and financials
led the way, while shares of consumer-staples and energy companies
lost ground.
In Asia, the Hang Seng Index gained 0.6%, while the Shanghai
Composite rose 0.7%.
The British pound continued its rally of recent days on rising
expectations of a Conservative Party victory in next week's general
election. The pound gained 0.4% to trade at $1.316, putting it on
track for its highest close since May.
The yield on the benchmark 10-year Treasury was 1.798%, up from
1.781% Wednesday.
Write to Paul J. Davies at paul.davies@wsj.com and Karen Langley
at karen.langley@wsj.com
(END) Dow Jones Newswires
December 05, 2019 16:43 ET (21:43 GMT)
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