Home Stocks Stocks gain on China trade, global growth optimism; Boeing shares lift Dow – MarketWatch

Stocks gain on China trade, global growth optimism; Boeing shares lift Dow – MarketWatch

11 min read

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Optimism over trade talks is bolstering market sentiment.

U.S. stocks rose Friday as major benchmarks aimed for their most robust weekly gains in a month with sentiment buoyed by encouraging headlines on U.S.-China trade negotiations and Chinese assurances of forthcoming economic stimulus.

Stocks were also expected to be affected by Friday’s quadruple witching, the simultaneous expiration of stock-index futures and stock-index options, as well as individual stock futures and options.

How did major indexes fare?

The Dow Jones Industrial Average

DJIA, +0.42%

rose 145 points, or 0.6%, to 25,855, while the S&P 500 index

SPX, +0.37%

climbed 15 points, or 0.6%, to 2,824. The Nasdaq Composite Index

COMP, +0.62%

advanced 74 points, 1%, to 7,705.

For the week, the Dow is set for a weekly gain of 1.6%, while the S&P 500 is on track to rise 3%, and the Nasdaq is on pace to rally 4%. The gains would mark the biggest weekly gain since the period ended Feb. 15, according to FactSet data.

What are benchmarks doing?

Investors digested comments from Chinese Premier Li Keqiang, Beijing’s No. 2 leader after President Xi Jinping, who expressed optimism that a trade deal between China and the U.S. can be achieved that suits both parties.

He said that the parties may be several weeks away from a tariff agreement, but described China as “very responsible and reasonable.” Separately, U.S. Treasury Secretary Steven Mnuchin, speaking to reporters after his Senate testimony in front of a finance committee said no date had been set for a meeting between Xi and Trump to complete a deal, adding that “there’s still a lot of work to do.”

Bloomberg News a day ago said a meeting that had tentatively been penciled in for the end of March would be pushed back to April.

Trade talks between the two of the globe’s largest economies has been chief among concerns for investors because an heated war between the two have the potential to hurt economies world-wide.

Li also addressed weakness in the world’s second-largest economy and pledged to maintain strong stimulus measures, such as lowering interest rates, cutting bank reserve ratios, and slashing taxes for consumers and businesses, sparking hopes that a stable Chinese economy could stem a recent trend of slowing global growth.

Read: Don’t look now, but global economic data is starting to surprise investors in a good way

Which data are in focus?

The New York Fed’s Empire State index fell to a reading of 3.7 in March from 8.8 in the prior month, a near two-year low. Economists had expected a reading of 10, according to a survey by Econoday.

U.S. industrial production rose by 0.1% in February, below the 0.4% increase expected by economists, according to a MarketWatch poll. January’s figure, however, was raised to show a 0.4% drop, rather than a 0.6% decline as previously estimated.

Job openings in the U.S. rose to 7.58 million in January, the third-highest level on record, according to the Labor Department.

Consumer sentiment rose in March to 97.8 from 93.8 in February, according to a preliminary reading of the University of Michigan consumer sentiment index. The reading was above the 95 level expected by economists polled by MarketWatch.

What are strategists saying?

“The move higher this morning is being driven by [China premier Li Keqiang’s] comments” that the Chinese government was committed to taking stimulus measures needed to prop up the world’s second largest economy, Brent Schutte, chief investment strategist at Northwestern Mutual Asset Management, told MarketWatch.

“You’re seeing smaller cap companies do well, which indicates a risk-on mood on Wall Street,” he added, pointing to strong consumer confidence data as reason to believe that the U.S. economy’s expansion has more room to run.

“This risk-on sentiment was mainly built on ground of a widespread optimism following President Trump’s recent statement about a ‘very responsible and reasonable China’. The U.S. president also added he will have news on a China trade deal in the next 3-4 weeks and that could lead to an extension of this year’s rally on stocks,” said Pierre Veyret, a technical analyst at ActivTrades.

Read: Why some investors say tech stocks are becoming less risky

Counterpoint: Longtime market bull sees unsettling parallel between today and March 2000

Which stocks are in focus?

Shares of Facebook Inc.

FB, -2.49%

fell 2.5% after the social media firm said that two senior executives were leaving the company.

Amazon Inc.

AMZN, +1.09%

stock rose 1.8% after KeyBanc Capital raised its rating on the stock to overweight.

Shares of Boeing Inc.

BA, +1.54%

 gained 2% following reports that it would push out a software update that could mitigate issues that led to the grounding of its 737 8 Max planes in the U.S. and abroad.

Bioscrip Inc.

BIOS, -21.92%

shares sank 26% after the company announced a deal to merge with privately held Option Care Enterprises Inc.

Shares of Ulta Beauty Inc.

ULTA, +9.11%

rallied 9.7% after the beauty-products retailer reported fiscal fourth quarter results late Thursday that surpassed expectations, while showing an increase in online sales.

How are other markets trading?

In Asia, stocks closed higher, with Japan’s Nikkei 225

NIK, +0.77%

China’s Shanghai Composite Index

SHCOMP, +1.04%

and Hong Kong’s Hang Seng Index

HSI, +0.56%

all rising more that 0.5%.

European stocks also rose, with the Stoxx Europe 600

SXXP, +0.68%

adding 0.7%.

In commodities markets, crude oil prices

CLJ9, -0.27%

were pressured, while gold

GCJ9, +0.53%

 settled higher, and the U.S. dollar

DXY, -0.14%

edged lower against its peers.

—Mark DeCambre contributed to this article

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