Stocks are rising as investors wait for President Donald Trump and President Xi Jinping of China to meet and discuss trade and more in Friday’s Stock Market Update. Investors have long hoped the two will use their meeting at the Group of 20 summit to start resolving the trade dispute between the two countries.
Tech and health care companies are making small gains while internet companies are down. Energy stocks slipped as crude oil fell again. U.S. oil briefly dropped under $50 a barrel for the first time since October 2017.
STOCK MARKET UDPATE
KEEPING SCORE: The S&P 500 index added 21 points, or 0.8 percent, to 2,759 at closing time. The Dow Jones Industrial Average rose 179 points, or 0.7 percent, to 25,518. The Nasdaq composite rose 57 points, or 0.8 percent, to 7,330. The Russell 2000 index of smaller-company stocks picked up 7 points, or 0.5 percent, to 1,533.
Stocks have rallied this week after falling to a six-month low last Friday. That’s pushed the index to a small gain this month, but it’s still 6.5 percent away from the all-time high it set in late September. Among other issues, that drop reflects investors’ pessimism that the U.S. and China will resolve their differences without causing damage to the global economy.
The two sides have been sparring for months over technology policy and other trade issues. The U.S. has announced tariffs on $250 billion in Chinese imports so far, with the tax rate on many products set to rise Jan. 1, while China put new taxes on $110 billion in U.S. goods. Wall Street is concerned that the lingering questions about tariffs and other trade issues will keep businesses from spending money.
THE STAKES: “The outlook for the global economy in 2019 does depend on some peace in the trade dispute between the U.S. and China,” said David Kelly, chief global strategist for JPMorgan Funds. He said the global stock market will probably jump if the two leaders announce the framework of a deal and fall if they don’t. But as dramatic as the yes-or-no reaction might be, he thinks the two sides will reach an agreement by early 2019.
“Nobody’s got much to gain from fighting a trade war, but we both are threatened with recession,” he said.
Kate Warne, an investment strategist with Edward Jones, said that even if the two sides announce the general terms of a deal or a cease-fire on new tariffs, many businesses will remain reluctant to spend until they know more details about a final agreement.
“There’s still a long way to resolve all of the issues and I suspect we’ll continue to see more of the back and forth that we’ve seen this week, prompting further market volatility as well as greater uncertainty,” she said.
THE LEADERS: Health care companies climbed. Biotech drugmaker AbbVie rose 3.8 percent to $93.35 after it said Pfizer agreed to wait until November 2023 before it starts selling a generic version of AbbVie’s inflammatory disease drug Humira in the U.S. The agreement is part of a licensing deal between the companies. Humira is the biggest-selling drug in the world by revenue, and it’s responsible for about two-thirds of AbbVie’s total sales.
Other biotech drugmakers also traded higher. Gilead Sciences rallied 3.1 percent to $71.83 and Amgen rose 2.5 percent to $207.43.
UNWANTED GUESTS: Marriott said the information of as many as 500 million guests at Starwood hotels has been compromised by a data breach that started in 2014 and September 2018. The company said the credit card information of some guests may have been taken, along with other personal details. The affected brands include W Hotels, St. Regis, Sheraton, Westin, Element, Aloft, The Luxury Collection, Le Méridien and Four Points.
The Attorney General of New York said she is opening an investigation into the breach. Marriott stock lost 5.5 percent to $115.22.
ENERGY: Benchmark U.S. crude fell more than 3 percent in morning trading and briefly slipped below $50 a barrel. It closed down 1 percent at $50.93 a barrel in New York. Brent crude lost 1.3 percent to $58.71 a barrel in London.
U.S. crude nosedived 22 percent this month, its biggest loss in a decade. Oil prices have been falling since early October as supplies have built up, partly because the U.S. agreed to hold off on sanctions for countries that import oil from Iran. Investors are also worried that a slowdown in global economic growth will reduce demand for fuels.
BONDS: Bond prices rose further. The yield on the 10-year Treasury note fell to 3.01 percent from 3.03 percent.
CURRENCIES: The dollar rose to 113.62 yen from 113.43 yen. The euro fell to $1.1313 from $1.1389.
OTHER COMMODITIES: Gold lost 0.4 percent to $1,226 an ounce. Silver fell 1.3 percent to $14.22 an ounce. Copper held steady at $2.79 a pound.
Wholesale gasoline lost 0.9 percent to $1.44 a gallon. Heating oil was little changed at $1.85 a gallon. Natural gas fell 0.7 percent to $4.61 per 1,000 cubic feet.
OVERSEAS STOCK MARKET UPDATE: The FTSE 100 index in Britain shed 0.8 percent and Germany’s DAX lost 0.4 percent. France’s CAC 40 fell less than 0.1 percent.
Japan’s Nikkei 225 index climbed 0.4 percent and the Hang Seng in Hong Kong added 0.2 percent. South Korea’s Kospi fell 0.8 percent.
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