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Stocks - Dow Soars on Easing U.S.-China Tensions

Stock MarketsJan 18, 2019 04:45PM ET
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Investing.com – The Dow soared Friday, led by industrials, on optimism that China and the United States would find a way to end their bitter trade dispute.

The Dow Jones Industrial Average rose 1.38%. The S&P 500 added 1.30%, while the Nasdaq Composite climbed 1.03%.

China offered to boost annual imports of U.S. goods by a combined value of more than $1 trillion in a bid to cut its surplus with the U.S., Bloomberg reported.

The news stoked investor optimism that China and United States will resolve their differences on trade.

The months-long trade war is on ice until March 1, after which, in the absence of an agreement, the U.S. could raise duties on imports from China to 25% from 10%.

The optimism on trade added strength to industrials, which were already rising thanks to gains in trucking company JB Hunt (NASDAQ:JBHT).

JB Hunt reported fourth-quarter earnings of 81 cents a share, well below expectations for earnings of $1.50 a share, while revenue of $2.32 billion was modestly above estimates of $2.31 billion. Its shares rose 6%.

Energy names also supported the broader market, gaining more than 1% on the back of a 3.2% surge in U.S. oil prices. The rosier outlook on trade eased concerns about slowing crude demand.

Elsewhere on the earnings front, VF Corporation (NYSE:VFC)., owner of brands including Vans and The North Face, delivered above-consensus earnings and guidance, sending its share price more than 12% higher.

That helped ease some of the recent pain in the beaten-down retail sector, which is down 7% over the past year. Macy's (NYSE:M), Nordstrom Inc (NYSE:JWN) and L Brands (NYSE:LB) ended day higher.

Energy names also supported the broader market, gaining more than 1% on the back of rising oil prices as a rosier outlook on trade eased concerns about slowing crude demand.

In tech, meanwhile, Netflix's (NASDAQ:NFLX) 4% drubbing was offset by bullish showing for other FANG stocks as Apple (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) and Facebook (NASDAQ:FB) closed in the green.

Stocks were also supported by remarks from New York Federal Reserve President John Williams.

Williams urged the Fed to exercise "prudence, patience, and good judgment," before hiking rates. The remarks helped further reduce investor concerns the Fed may overshoot policy tightening.

In other corporate news, Tesla (NASDAQ:TSLA) slumped 13% after it said it will cut its workforce by 7% to drive cost savings as it seeks to produce a cheaper model 3. Analysts, however, said the move was "not unreasonable" as the automaker had completed the labor-intensive of its model 3 production ramp.

"We think the workforce cut is not unreasonable, as the company ramped hiring during the Model 3 production ramp and has now likely completed the labor-intensive portion" of the cutting, Baird said in a client note.

Top S&P 500 Gainers and Losers Today:

Pacific Gas & Electric Co (NYSE:PCG), VF Corp.(NYSE:VFC), Schlumberger (NYSE:SLB) and Western Digital (NASDAQ:WDC) were among the top S&P 500 gainers for the session.

CarMax (NYSE:KMX), Netflix (NASDAQ:NFLX) and Fortinet (NASDAQ:FTNT) among the worst S&P 500 performers of the session.

Stocks - Dow Soars on Easing U.S.-China Tensions
 

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Joe Jack
Joe Jack Jan 20, 2019 2:35AM ET
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Can you say, ‘Bear market bounce?’
Gabe Domen
Gabe Domen Jan 18, 2019 9:08PM ET
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Everybody is crying because they were told we are going to recession and are out watching and waiting. Don't worry, one day will be true but for the moment enjoy the fireworks. PPT, the Fed and the White house is paying (collecting) for the party.
Ghoda Sandrokottos
Ghoda Sandrokottos Jan 18, 2019 5:24PM ET
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Almost four weeks markets are rising on empty hopes of trade deal & the 'patient' looking fed! None of this is likely to stay in long run. So bears com'on !
Keith Jarrell
KingKeith Jan 18, 2019 4:45PM ET
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Yes, unfortunately as long as the dumb money believes the lie, the lie becomes the truth. That is, until the smart money steps back in to remind them what reality is.
Dave Jones
Dave Jones Jan 18, 2019 4:39PM ET
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companies report poor results and the market soars? Sounds like 2007 all over again
erik maguina
erik maguina Jan 18, 2019 4:17PM ET
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can we just say this is a 48 hour rise before it goes back down?
King Power
King Power Jan 18, 2019 4:11PM ET
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Until it is confirmed by POTUS, this is all rumor unfortunately. Until it does down, I speculate he will.
King Power
King Power Jan 18, 2019 4:11PM ET
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Until then, stay tuned.
 
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