Friday's Stock Market Close: US Equities Rise On China - US Trade Deal Optimism, Brexit Passage

U.S. stocks rose on Friday on renewed optimism about the China-U.S. trade deal, Brexit passing in the U.K. Parliament and some generally good economic data in the U.S.

The Dow Jones Industrial Average gained 77.79 points to 28,454.75 while the S&P 500 climbed 15.83 points to 3,221.20 and the Nasdaq Composite Index rose 37.74 points to 8,924.96.

For the week, the Dow rose 319.37 points, or about a 1.1% gain.

Volume on the New York Stock Exchange totaled 3.34 billion shares with 1,740 issues advancing, 266 setting new highs, and 1,206 declining, with 7 setting new lows.

Active movers were led by, Advanced Micro Devices (AMD), Apple (AAPL) and Intel (INTC)

President Donald Trump tweeted Friday that he had a “very good talk” with Chinese President Xi Jinping about the U.S.-China trade deal, adding China already had started large scale purchases of U.S. agricultural products.

Xi Jinping himself on Friday said the phase one trade deal will benefit both China and the U.S.

“The first phase economic and trade agreement reached between the U.S. and China is a good thing for the U.S., China and the entire world,” Xi said. “Both the U.S. and Chinese markets and the world have responded very positively to this. The U.S. is willing to maintain close communication with China and strive to sign and implement it as soon as possible.”

“You’re seeing the geopolitical risk that was in the market seep out now,” said Brent Schutte, chief investment strategist at Northwestern Mutual Wealth Management. “You had the Fed backstopping risk throughout the year but you had those geopolitical worries. Now, they’re abating and the market is moving higher.”

The University of Michigan said its final reading of its December consumer sentiment index came in at 99.3, up from 96.2 in November.

Consumer spending rose 0.4% in November, the government said on Friday – it was the biggest increase since July. The cost of goods and services (the PCE price index) rose 0.2% -- making the yearly rate of inflation move up to 1.5%, still well below the Fed’s 2% target.

“Overall, the bottom line is that the economic numbers keep coming in strong,” said Joe Saluzzi, partner, co-head of equity trading at Themis Trading. “I think a lot of people might not have been positioned for this.”

The government’s final reading of third-quarter gross domestic product growth was left unchanged at 2.1%.

“If the economy is not rolling over and going into a recession ditch, and tame core consumer inflation is low at 1.6%, you can bet your bottom dollar the Federal Reserve is going to keep enough punch in the punch bowl to make sure that 2020 is going to be a super year for stocks,” said Chris Rupkey, chief financial economist for MUFG Union Bank. “The S&P 500 is paying more in dividends than the Federal Reserve is paying on cash.”

Britain’s Members of Parliament passed Boris Johnson’s bill for the U.K. to leave the European Union on Jan. 31. The bill also prohibits the government from extending the transition period beyond 2020.

The Bank of England named Andrew Bailey as governor to succeed Mark Carney. Bailey is chief of the Financial Conduct Authority, which regulates London’s financial center, but is independent of the government.

Overnight in Asia, markets finished mixed. The Hang Seng gained 0.25% while Japan’s Nikkei-225 fell 0.2% and China’s Shanghai Composite was down 0.4%

European markets all closed higher with the FTSE 100 up 0.11% while Germany's DAX rose 0.81% and France's CAC 40 climbed 0.82%.

Crude oil futures fell 1.36% at $60.35 per barrel and Brent crude slipped 0.14% at $66.05. Gold futures dropped 0.21%.

The euro fell 0.4% at $1.1078 while the pound sterling slipped 0.05% at $1.3004.

The yield on the 10-year Treasury rose 0.47% to 1.917% while yield on the 30-year Treasury gained 0.09% to 2.346%.