Thursday's Stock Market Open: US Equities Rise As China Cuts Tariffs On Some US Goods By Half

U.S. stocks traded higher at noon on Thursday after China said it will cut tariffs on $75 billion of U.S. goods.

The Dow Jones Industrial Average rose 39.88 points to 29,330.73 while the S&P 500 gained 7.91 points to 3,342.60 and the Nasdaq Composite Index advanced 47.98 points to 9,556.66.

China’s Ministry of Finance said on Thursday that it will cut by half tariffs on hundreds of U.S. goods valued at about $75 billion, effective Feb. 14. Tariffs on some U.S. goods will be halved from 10% to 5%, and others from 5% to 2.5%.

“I think that would be good ... if we can get these tariff barriers lowered, and get a normalization of relations that also includes some negotiation about those other sticking points, you know the IP and so on. Then I think that’s very positive,” said Kingsley Jones, chief investment officer at Jevons Global.

China’s National Health Commission said as of Wednesday night the number of coronavirus infections topped 28,018 and 563 people have died in the country.

“Companies are going to continue to struggle in the short term” due to disruptions caused by the virus, said Joe Zidle, chief investment strategist at Blackstone Group Inc. But stimulus measures recently taken by Beijing “gave global investors a degree of confidence that the Chinese policy makers had at least taken the worst-case scenario off the table.”

German factory orders fell by 0.5% in the fourth quarter of 2019 .

The Philippine central bank said Thursday it reduced the rate on its overnight reverse repurchase facility by 25 basis points to 3.75%. the central bank also said the spread of the coronavirus “could have an adverse impact on economic activity and market sentiment in the coming months.”

Australia’s Prime Minister Scott Morrison said he expects the economic impact of the coronavirus outbreak will be “very significant,” due to the country’s increased economic exposure to China.

The U.S. Labor Department said on Thursday nonfarm productivity increased at a 1.4% annualized rate in the fourth quarter of 2019. Productivity decreased at an unrevised 0.2% pace in the July-September period. Growth in unit labor costs slowed to a 1.4% rate.

Initial jobless claims fell by 15,000 to 202,000 in the seven days ended Feb. 1, the government said on Thursday.

Dallas Fed President Robert Kaplan said he expects U.S. gross domestic product to grow by 2.25% this year.

"My outlook for growth would be even firmer if not for Boeing and coronavirus situations," he said. "Having a little more trade stability will help global growth this year, less uncertainty should help stabilize business fixed investment."

Overnight in Asia, markets finished higher. China’s Shanghai Composite gained 1.72%, while Hong Kong’s Hang Seng rose 2.64%, and Japan’s Nikkei-225 advanced 2.38%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 0.3%, France’s CAC-40 climbed 0.88% and Germany’s DAX gained 0.72%.

Crude oil futures gained 0.16% at $50.83 per barrel and Brent crude dropped 0.81% at $54.83. Gold futures climbed 0.36%.

The euro dipped 0.2% at $1.0978 while the pound sterling fell 0.54% at $1.2932.