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Stock Market News for Dec 5, 2019

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U.S. stock markets rebounded on Wednesday after three consecutive days of losses buoyed by the news that both the United States and China are moving closer to sign a phase-one deal in order to resolve more than a year-long trade war. All three major stock indexes closed in the positive territory.

The Dow Jones Industrial Average (DJI) climbed 146.97 points or 0.5% to close at 27,649.78. The S&P 500 surged 0.6% to close at 3,112.76. Meanwhile, the Nasdaq Composite Index closed at 8,566.67, gaining 0.5%. The fear-gauge CBOE Volatility Index (VIX) tumbled 7.3% to close at 14.80. A total of 7 billion shares were traded Wednesday, higher than the last 20-session average of 6.79 billion. Advancers outnumbered decliners on the NYSE 2.35-to-1 ratio. On Nasdaq, a 1.58-to-1 ratio favored advancing issues.   

How Did The Benchmarks Perform?

The Dow closed in positive territory with 22 components of the 30-stock blue-chip index closing in the green while 8 ended in red. The tech-laden Nasdaq Composite also ended in the positive territory due to strong performance of tech stocks, especially semiconductor stocks. The S&P 500 also finished in the green. The Energy Select Sector SPDR (XLE) gained 1.5%.  Notably, All 11 sectors of the benchmark index closed in the green.

Positive News From Trade War Front

Per Bloomberg News, United Sates and China are earnestly negotiating to reach at least a partial trade deal that will gives space two both countries o grow more. Citing sources familiar to recent developments, the report said that an interim trade deal is likely to be signed before the U.S. government imposed fresh tariffs on China effective Dec 15.

Notably, on Dec 3, President Trump said at NATO summit in London that his administration may consider postponing the phase-one trade deal with China until the completion of 2020 U.S. Presidential election. Notably, the election is scheduled on November 2020.

According to Trump, “In some ways, I like the idea of waiting until after the election for the China deal, but they want to make a deal now and we will see whether or not the deal is going to be right.” He further clarified, “I have no deadline, no ... In some ways, I think it is better to wait until after the election if you want to know the truth.”

Following Bloomberg news, shares of trade-sensitive companies like Micron Technology Inc. MU, Deere & Co. DE and Apple Inc. AAPL soared 2.4%, 1.1% and 0.9%. All three stocks carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Economic Data

The Institute for Supply Management (ISM) reported that its services (non-manufacturing) index for the month of November decreased to 53.9 from 54.7 in October. The consensus estimate was also 54.7. The index for business production in the service sector declined to 51.6%, the lowest level since 2010. Notably, any reading above 50 indicates expansion of services activities. However, a similarly study IHS Markit revealed that U.S. services activities increased to 51.6 in November from 50.6 in October.

U.S. Energy Information Administration reported that U.S. crude oil inventories decreased by 4.9 million barrels for the week ending Nov 29. Following the newsU.S. benchmark West Texas Intermediate crude futures climbed $2.33 or 4.2% to settle at $58.43 a barrel, its highest daily gain since September.

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