Thursday's Stock Market Open: China Trade Optimism Sends Stocks Soaring

Stocks headed higher at the open as China announced trade negotiators had reached agreement on easing tariffs as talks on a phase 1 U.S.-China trade deal continued.

The Dow Jones Industrial Average surged 236 points shortly after noon to 27,728 while the S&P 500 jumped 16 points to 3,093 and the Nasdaq Composite increased 62 points to 8,472.

The Labor Department reported initial jobless claims for the week ended Nov. 2 were 211,000, down 8,000 from the previous week’s revised level. The four-week moving average was 215,250, up 250 from the previous average.

U.S. and Chinese negotiators have agreed to lift some tariffs on each other as part of the first phase of a comprehensive trade deal, China’s Commerce Ministry said.

“If the phase-one deal is signed, China and the U.S. should remove the same proportion of tariffs simultaneously based on the content of the deal,” spokesman Gao Feng told reporters, adding that talks in the past two weeks have been constructive.

The Bank of England decided Thursday to leave its key interest rate unchanged at 0.75% and cut its economic forecast, blaming a weaker global environment and new trade barriers resulting from Brexit that will limit growth. The BoE said growth in the United Kingdom had slowed considerably this year, with the quarterly rate half of the three-year average. Inflation is expected to fall sharply in the near-term.

LVMH Moet Hennessy Louis Vuiton’s (LVMUY) shares surged this week making it one of the most valuable companies in Europe, surpassing Volkswagen AG (VOW3.DE) and HSBC (HSBC), and sneaking up on Royal Dutch Shell PLC (RDS-A). LVMH capitalization topped $222 billion this week.

Global markets were mostly higher.

In Asia, Hong Kong’s Hang Seng closed up 0.57% while Japan’s Nikkei 225 added 0.11% and China’s Shanghai Composite was flat, posting a fractional increase. Australia’s S&P/ASX gained 1%.

In Europe, London’s FTSE 100 was ahead 0.13%, while the German DAX added 0.83% and the French CAC 40 increased 0.41%. The Stoxx Europe 600 gained 0.37%.

On currency markets, the British pound lost 0.23% to $1.2827 while the euro dipped 0.21% to $1.1045. The dollar index was 0.21% higher.

Oil futures were higher. Crude oil added 2.18% to $57.58 a barrel. Brent crude was up 1.47% to $62.65. Gold and silver futures were lower.