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Wall Street jumps but ends off highs after partial trade deal

Stock MarketsOct 11, 2019 06:03PM ET
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By Caroline Valetkevitch

NEW YORK (Reuters) - U.S. stocks ended more than 1% higher on Friday though well off the day's highs after the announcement of a partial trade deal between the United States and China.

Indexes cut their gains late in the session as the deal was announced amid worries over the possibility of further flare-ups before the agreement is finalized, strategists said.

President Donald Trump, speaking to reporters after talks with Chinese Vice Premier Liu He, said the United States and China had come to a substantial phase-1 trade deal, reaching agreement on intellectual property, financial services and big agricultural purchases.

The preliminary, partial deal was the biggest step toward resolving a 15-month tariff war between the world's two largest economies.

The market had risen in recent days due to optimism for an agreement and the S&P 500 (SPX) was up as much as about 1.9% earlier in the session.

"The main reason the market rallied the past couple of days was hope that there would be an agreement, even a small agreement, and that this trade war would be done for the foreseeable future," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

"It looks like while there is an agreement, this is still going to ... drag out and be an issue."

Top-level discussions between the two countries concluded their second day on Friday.

Cyclicals were among the day's best-performing groups, with the S&P industrial index (SPLRCI) up about 2% ahead of the third-quarter earnings season, which is set to begin next week.

The Dow Jones Industrial Average (DJI) rose 319.92 points, or 1.21%, to 26,816.59, the S&P 500 (SPX) gained 32.14 points, or 1.09%, to 2,970.27 and the Nasdaq Composite (IXIC) added 106.27 points, or 1.34%, to 8,057.04.

Indexes also gained for the week, with the Dow and Nasdaq up 0.9% each and the S&P 500 up 0.6%.

The timing of the trade news had a lot to do with the late-day volatility, said Michael James, managing director of equity trading at Wedbush Securities in Los Angeles.

"There were 15 minutes to go in the trading day on a Friday ... after the Dow had risen 700 points in the last two days," he said. "Anything that was less than a comprehensive agreement was likely to see some degree of market sell off."

Analysts expect S&P 500 earnings to have declined 3.2% year-on-year in the third quarter, which would mark the first fall since 2016, according to IBES data from Refinitiv.

Bets for another interest rate cut by the Federal Reserve fell after data showed a rise in consumer sentiment for the month of October.

Apple's stock (O:AAPL) rose 2.7% as Wedbush raised its price target, citing confidence in the company's new video streaming service.

The S&P industrial index was boosted by a 17.2% jump in shares of Fastenal Co (O:FAST) after the industrial distributor beat quarterly profit expectations.

Advancing issues outnumbered declining ones on the NYSE by a 3.14-to-1 ratio; on Nasdaq, a 3.08-to-1 ratio favored advancers.

The S&P 500 posted 27 new 52-week highs and no new lows; the Nasdaq Composite recorded 44 new highs and 60 new lows.

Volume on U.S. exchanges was 7.59 billion shares, compared to the roughly 7 billion average for the full session over the last 20 trading days.

Wall Street jumps but ends off highs after partial trade deal
 

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Guess it
7German7 Oct 12, 2019 7:09AM ET
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u better short everything way to expensive dow has gaps on 500 and 400 dax has some either
Malaki Philippines
BuyDipsSellTips Oct 11, 2019 8:54PM ET
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Hahaha trade deal probably for soy beans and NBA only
Danis Ko
Danis Ko Oct 11, 2019 7:06PM ET
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I think that he is trying to pretend good deal. However, it is not true. This is even worse for market. Because FED does not have any reason to lower rate this month. So, I think that it’s time to sell stocks before market notices this.
Andrew Hook
Andrew Hook Oct 11, 2019 6:04PM ET
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Where is the tremendous deal, no even a tweet from Don Corleone. Lol should be an awesome he will keep secret now phase 1 is done
jiaming wang
jiaming wang Oct 11, 2019 5:35PM ET
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we need see the confirmation from Trump's weekend's Twitter
Rob Hunter
Rob Hunter Oct 11, 2019 5:16PM ET
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More *** Sell the news. China stalling again
형빈 전
형빈 전 Oct 11, 2019 5:00PM ET
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??? : Diablo Immortal = ??? : phase one deal
Steve Bucher
Steve Bucher Oct 11, 2019 4:44PM ET
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From what I have read, the US is the only party making concessions. The only concession that China has made is a trap to allow more foreign investment while President Trump is promoting restrictions on investment. I believe that it is time for Americans to free themselves of the socialist manipulation. The price we have paid for cheap labor is too high when you include the loss of technology and patent rights.
Andrew Hook
Andrew Hook Oct 11, 2019 4:44PM ET
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Sources please : From what I have read (fake news)
Roland Gessler
DreamRight Oct 11, 2019 4:44PM ET
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Ahhh - now that AAPL and CAT and CISCO made a fortune with the extended Chinese and other east-Asian workbench, a fortune that allows them to dominate US politics, now you suddenly detect moral issues and the danger that comes with the dependencies? You knew that before, you wanted it, you loved it, you profited from it - and SUDDENLY you realize that it all comes with a price? SHAME on YOU!!!
chris cp
chris cp Oct 11, 2019 4:31PM ET
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Trump's Twitter is full of "LOVE" today, looks like he is in a good mood for a deal, or at least a partial deal with the Chinese.
Juan Treviño
Juan Treviño Oct 11, 2019 4:13PM ET
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How many hours will this agreement last?
Chris Sundo
Chris Sundo Oct 11, 2019 3:47PM ET
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But it's beautiful that Trump finally makes a common sense deal and that the Chinese are finally waking up. Awesome!  Paaah-dy time
ottin nerner
ottin nerner Oct 11, 2019 3:47PM ET
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who says it's a deal???? it's a trap!!!! lol!!!! phase 1 has ended.... prepare for another roller coster phases!!!!
silver fox
silver fox Oct 11, 2019 3:46PM ET
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Go get them Trump. You've got those greasy zips on the run!
Mary Kinney
Mary Kinney Oct 11, 2019 3:29PM ET
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I might find a way to like 45 a tiny tiny sliver if he would DO what he says... trade wars are. so easy NOT
Jun Man
Jun Man Oct 11, 2019 2:53PM ET
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This sounds like a temporary agreement... So the war will ignite again once Trump gets reelected.
Dudu Ll
Dudu Ll Oct 11, 2019 2:53PM ET
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Tremendous wrong!
ato spampatti
ato spampatti Oct 11, 2019 1:56PM ET
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It seems they have reached the agreement to try to have an agreement... this pump Will end very soon
Guess it
7German7 Oct 11, 2019 1:12PM ET
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deal or no deal all markets ate overvalued europe germany forgets that is into a recession and us forget already worse ISM
TA XVCI
TA XVCI Oct 11, 2019 1:12PM ET
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True words. We are all living in a denial. To overvalued with all these problems behind us.
Guess it
7German7 Oct 11, 2019 1:12PM ET
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indeed they can buy it i did not my choice bad choice but ya take losses recover and stand up on 1 side i hope no deal so markets can fall back heavy on other side i hope a deal cause finally this hoping headlines can stop
Rod Cst
Rod Cst Oct 11, 2019 1:12PM ET
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Welfare EU is bankrupt but US will keep winning. Just needed to show Chinas who's the boss beforehand.
Mart Bab
Rubberduck1973 Oct 11, 2019 1:12PM ET
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Rod Cst if eu is bankrupt its because of nummer one export product of us. Economical crisis. Al market crashes started in the us. And when other countries start climbing out of the crisis, the us impose tariffs.
Andrew Hook
Andrew Hook Oct 11, 2019 12:43PM ET
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now is interim trade agreement. Total agreement was the plan fees days ago. Grump loser
Bade Sahib
Bade Sahib Oct 11, 2019 12:01PM ET
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Trump does not know what to do. Either way he is toast . Bad deal market ia down And the Chinese will not give him the time of day
Jeff Chevalier
Jeff Chevalier Oct 11, 2019 11:48AM ET
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The Chinese delegation will come, talk, buy some trinkets for the wife and kids and leave without a deal. How anyone can put their money into this amazes me...
ato spampatti
ato spampatti Oct 11, 2019 11:47AM ET
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futures are going down quickly... maybe stock Will Be Red on monday
eddie glass
eddie glass Oct 11, 2019 11:40AM ET
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monday: "worst market drop of 2019 as trade fears worsen"
Steve Bucher
Steve Bucher Oct 11, 2019 11:40AM ET
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It is October after all.
brad merck
brad merck Oct 11, 2019 11:34AM ET
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fake news , trump wil colocate more tariffg
 
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