Thursday's Stock Market Open: US Equities Rise On China Trade Deal Optimism

U.S. stocks traded higher Thursday on continued optimism over a China-U.S. trade deal and some good news on holiday retail sales.

The Dow Jones Industrial Average rose 61.32 points to 28,576.77 while the S&P 500 climbed 10.49 points to 3,233.87 and the Nasdaq Composite Index rose 49.27 points to 9,002.15.

A spokesman for the Chinese Commerce Ministry said China and the U.S. are in close communication on signing the initial phase of a trade deal. U.S. President Donald Trump said Tuesday the “deal is done. It’s just being translated right now."

U.S. retail sales, excluding automobiles, for Nov. 1 through Christmas Eve climbed by 3.4% from a year ago, preliminary data from Mastercard SpendingPulse indicated. Online sales rose 18.8% in that period, compared with only a 1.2% increase for in-store sales.

“Good news on the trade front as Trump said the trade deal will be signed at the White House coupled with 2019 holiday retail sales rising 3.4% better than last year, will likely keep the bulls fully in charge,” wrote Peter Cardillo, chief market economist at Spartan Capital Securities.

“The consumer continues to be shown as the supporting pillar,” said Tim Courtney, chief investment officer at Exencial Wealth Advisors. “They’re continuing to spend and they’re not cutting back.”

The Labor Department said Thursday initial jobless claims fell 13,000 to a seasonally adjusted figure of 222,000 for the week ended Dec. 21. Economists had forecast claims would drop to 224,000.

The Mortgage Bankers Association said mortgage application volume fell by 5.3% last week over the previous week, as mortgage interest rates approached 4%.

“The 10 Year Treasury yield increased last week amid signs of stronger homebuilding activity and solid consumer spending, leading to a rise in conventional conforming and jumbo 30-year mortgage rates to just under 4%,” said Mike Fratantoni, MBA’s chief economist. “We are in the slowest time of the year for the purchase market. The increase in construction activity will bolster housing inventories, which should be a positive for purchase volumes going into 2020.”

Globally, Japan’s Nikkei-225 rose 0.6% and China’s Shanghai Composite jumped 0.85%. Hong Kong’s Hang Seng market was closed for the holiday, as were European markets.

Crude oil futures rose 0.9% at $61.66 per barrel and Brent crude gained 0.77% at $66.67. Gold futures gained 0.54%.

The euro gained 0.11% at $1.1104 while the pound sterling rose 0.4% at $1.3006.