By Mark DeCambre, MarketWatch , Sunny Oh
Amid conflicting reports, it's unclear if a substantive agreement can be reached by the U.S. and China
Stocks climbed in early Thursday trading after President Donald Trump said he would meet China's chief trade negotiator at the White House on Friday. This comes amid the start of two days discussions in Washington between the world's biggest economies.
How are the benchmarks performing?
The Dow Jones Industrial Average rose 9 points, or less than 0.1% , to 26,355. The S&P 500 was up 2 points, or less than 0.1%, to 2,921. The Nasdaq Composite picked up 14 points, or 0.2%, to 7,918.
On Wednesday, the Dow rose 181.97 points, or 0.7%, to end at 26,346.01. The S&P 500 index gained 26.34 points to finish at 2,919.40, up 0.9%, while the Nasdaq Composite Index added 79.96 points, or 1%, to close at 7,903.74.
What drove the stock market?
President Donald Trump tweeted that (http://www.marketwatch.com/story/trump-says-hell-meet-with-chinese-vice-premier-on-friday-2019-10-10)he would meet Chinese Vice Premier Liu He to advance a trade deal, bolstering hopes that the U.S. was looking to strike a resolution soon.
Liu He is meeting with U.S. Trade Representative Robert Lighthizer and U.S. Treasury Secretary Steven Mnuchin in Washington, with the hope that the parties can resolve, at least partially, tensions over trade that have stoked anxieties on Wall Street, though it is unclear if a substantive agreement can be achieved.
Markets were whipsawed overnight Thursday by reports from the South China Morning Post suggesting that the China delegation would leave Washington on Thursday, a day earlier than had been planned. However, a White House spokesperson later told CNBC that there were no changes to plans (https://www.cnbc.com/2019/10/09/us-futures-drop-after-chinese-media-reports-that-us-and-china-have-made-no-progress-in-trade-talks.html) of the Beijing representatives.
Bloomberg News (https://www.bloomberg.com/news/articles/2019-10-10/u-s-weighing-currency-pact-with-china-as-part-of-partial-deal) reported that the White House may implement a previously agreed upon currency deal with China ahead of schedule, and suspend tariff hikes to 30% from 25% scheduled to take effect Oct. 15 on some $250 billion in China products. Those moves would be part of a first-phase agreement with China, the report said, with negotiations on critical issues such as intellectual-property rights and forced technology transfers coming at a later time.
Separately, the New York Times reported (https://www.nytimes.com/2019/10/09/us/politics/trump-huawei-trade.html) Wednesday night that President Donald Trump had approved issuing licenses to some U.S. companies to conduct business with Chinese telecom giant Huawei Technologies. The U.S. blacklisted Huawei earlier this year, and allowing sales of non-sensitive products could help defuse trade tensions.
"The last round of trade talks ended in July without an agreement. Expectations for a breakthrough this time are low, but there is good reason to expect that talks will continue," wrote strategists at UniCredit in a Thursday research note.
"There appears to be some willingness on both sides to reach a deal," the strategists said.
In economic data, U.S. consumer price inflation was little changed in September, (http://www.marketwatch.com/story/consumer-inflation-flat-in-september-cpi-shows-giving-fed-room-to-cut-rates-2019-10-10) giving the Federal Reserve room to cut interest rates in late October. Weekly jobless claims (http://www.marketwatch.com/story/jobless-claims-fall-10000-to-210000-in-early-october-show-no-sign-of-rising-layoffs-2019-10-10)fell in early October.
Investors also saw some commentary from Dallas Fed President Robert Kaplan who said he's (http://www.marketwatch.com/story/feds-kaplan-says-hes-open-minded-about-further-rate-cuts-2019-10-10) open-minded on the outlook for further rate cuts. The central bank has already cut its benchmark interest rate by a half percentage point this year.
Which stocks are moving?
PG&E's stock(PCG) plunged after a judge ruled to allow for a competitive bankruptcy plan (http://www.marketwatch.com/story/pges-stock-dives-in-active-trading-after-bankruptcy-ruling-2019-10-10), opening up the path for Elliott Management Group and other bondholders to push for their own chapter 11 plan. Their proposal would involve raising new money and using most of PG&E's equity to pay off the utility firm's debts.
Shares for Ra Pharmaceuticals Inc. (RARX) surged after Belgian biopharma company UCB agreed to acquire the Mass-based biopharma company (http://www.marketwatch.com/story/belgiums-ucb-to-acquire-ra-pharma-in-cash-deal-valued-at-about-25-billion-2019-10-10)for $2.5 billion.
Kroger Co.'s stock(KR) tumbled after a Jefferies analyst called the grocer's tech investment into Ocado a "misstep," downgrading the company to hold from buy (http://www.marketwatch.com/story/kroger-downgraded-with-analysts-calling-the-grocers-costly-tech-investment-a-misstep-2019-10-10).
How are other assets trading?
The yield on the 10-year U.S. Treasury note was up 4.7 basis points to 1.632%, from (http://www.marketwatch.com/story/treasury-yields-push-higher-after-china-moots-partial-trade-deal-2019-10-09)1.585% late Wednesday.
(http://www.marketwatch.com/story/gold-edges-higher-ahead-of-trade-talks-2019-10-09)Gold futures fell after posting small gains on Wednesday. Gold for December delivery was down 0.9% at $1,499.00 an ounce after rising 0.6% on Wednesday.
West Texas Intermediate crude for November delivery rose 68 cents, or 1.3%, at $53.27 a barrel on the New York Mercantile Exchange.
In Asia overnight Thursday, trade was mixed, with Hong Kong's Hang Seng Index added 0.1% to 25,707.93, the China CSI 300 rose 0.8% to reach 3,874.64, and Japan's Nikkei 225gained 0.5% to 21,551.98. The Stoxx Europe 600, meanwhile, edged 0.1% lower to 380.00.
(END) Dow Jones Newswires
October 10, 2019 10:17 ET (14:17 GMT)
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