Thursday's Stock Market Open: Stocks Higher As US-China Trade Talks Get Underway

U.S. stocks were rising at midday Thursday as high-level trade talks between the U.S. and China got underway in Washington and President Trump announced he would meet with China's chief negotiator Friday.

The Dow Jones Industrial Average opened off 30 points but then reversed course and was up 219 points shortly before noon to 26,565. The Nasdaq Composite gained 72 points to 7,975 and the S&P 500 added 26 points to 2,946.

Trump tweeted China wants to make a deal and he would meet with Vice Premier Liu He on Friday at the White House.

The White House was poised to unveil a previously negotiated currency pact with China in the first-phase of a deal that could result in the suspension of next week’s planned 5-point tariff increase on $250 billion in Chinese goods.

Liu was in Washington to meet with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. President Trump has said he wants more than just an agricultural agreement and will not accept a “bad” pact. Neither side appeared optimistic about a breakthrough. The last round of talks collapsed in May.

In recent days, Beijing has signaled it wants to narrow the scope of the talks.

The U.S.-China trade tensions have been weighing down the world economy. Recent U.S. economic reports indicate the economy is slowing and gross domestic product could drop to a 1.8% growth rate by 2021 while China’s economic growth could slow to a 27-year low of 6.2% in the second quarter next year.

Kristalina Georgieva, managing director of the International Monetary Fund, noted earlier this week 75 percent of the world economy was accelerating just two years ago. This year, slower growth is expected in 90 percent of the global economy.

Worldwide manufacturing already is taking the brunt of trade tensions and Georgieva warned the slowdown could hit services and consumption soon. The problem is not just the dispute between the U.S. and China, but Britain’s divorce from the European Union as well.

“Everyone loses in a trade war,” she said in a webcast.

On global markets Asian and European stocks closed higher.

Hong Kong’s Hang Seng added 0.1% while Japan’s Nikkei 225 gained 0.45% and China’s Shanghai Composite was up 0.78%. Australia’s S&P/ASX was flat, up just 0.01%.

The London FTSE 100 was up 0.28% while the German DAX was off 0.58% and the French CAC 40 was up 1.27% in early afternoon trading. The Stoxx Europe 600 gained 0.82%%.

On currency markets, the British pound was 1.52 cents at $1.2358 while the euro added 0.47 cents to $1.1018. The dollar index was off 0.39%.

Oil futures were higher. Crude oil added 56 cents to $53.17 while Brent crude added 36 cents to $58.68. Gold and silver futures were lower.