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U.S. stocks gave back early gains early Thursday, after opening higher with investors optimistic about prospects for a partial U.S.-China trade deal after Chinese officials indicated that delegates remain in “close contact”, but stocks are still on track for a weekly decline,
How are major benchmarks performing?
The Dow Jones Industrial Average
DJIA, -0.18%
was down 78 points or 0.3% at 27,572 while the S&P 500
SPX, -0.13%
was off 8 points or 0.3% at 3,104 and Nasdaq 100
COMP, -0.16%
was down 24 points or 0.4% higher at 8,542.
On Wednesday, the Dow rose 146.97 points, 0.5%, to 27,649.78 while the S&P 500 index added 19.56 points, or 0.6%, to close at 3,112.76 and the Nasdaq Composite Index advanced 46.03 points, or 0.5%, to end the session at 8,566.67.
For the week, the Dow is on track to decline 1.4%, the S&P 500 is poised for a 0.9% weekly skid, while the Nasdaq Composite was on track for a decline of 1.1%, as of Thursday’s close.
What’s driving the market?
Investors were still optimistic about a Sino-American trade deal after a spokesman for China’s Ministry of Commerce, Gao Feng, said at a weekly briefing on Thursday that negotiations toward a so-called phase-one pact to cease tariff hostilities between the world’s largest economies are progressing. However, Feng didn’t provide further details on talks and emphasized that China wants a rollback of existing tariffs to be included as a part of any resolution.
The comments come after President Donald Trump, speaking at a meeting with German Chancellor Angela Merkel on Wednesday, described negotiations in upbeat terms ahead of a Dec. 15 deadline at which import duties will be placed on $156 billion in China goods.
President Trump earlier in the week had raised fears that a resolution may not be achieved until after the U.S. 2020 presidential elections.
China and the U.S. have 10 days to reach a trade deal before additional U.S. tariffs on Chinese goods take effect which would target an additional $156 billion in Chinese goods.
“Progress on U.S.-China trade discussions needs to come sooner rather than later if economic growth or corporate profits are going to improve in 2020,” John Lynch, Chief Investment Strategist for LPL Financial, said in note.
In U.S. economic data, the nation’s trade deficit dropped almost 8% in October to a 16-month low, largely because of lower imports from China. However, the U.S. is on track to record the biggest annual trade deficit in 11 years despite President Trump’s trade war with China.
The number of Americans who applied for unemployment benefits at the end of November fell to the lowest level in seven months and returned close to a 50-year low, but the sharp decline in jobless claims likely stems in part from the Thanksgiving holiday.
“The economy’s recession scare is history with the labor markets strong as a bull, and the narrowing of the trade deficit helping the economy to grow at least 1-1/2 percent this quarter,” MUFG chief economist Chris Rupkey said.
A report on U.S. factory orders for October is also set to be released at 10 a.m. Eastern.
What stocks are in focus?
Kroger shares
KR, -3.27%
fell after the supermarket chain’s third-quarter earnings fell short of estimates.
United Airlines
UAL, +0.03%
said Thursday that chief executive Oscar Munoz will transition to the role of executive chairman of the board effective May of 2020. Munoz will be succeeded by Scott Kirby, who is currently president.
Office-messaging company Slack Technologies Inc.
WORK, -3.32%
reported quarterly results and raised its full-year guidance.
H&R Block’s
HRB, -0.19%,
the tax adviser, reported that its net loss widened from a year earlier in its recent quarter, and reaffirmed its revenue guidance for the year.
Dollar General Corp. shares
DG, +1.17%
rose after the discount retailer beat estimates for its fiscal third quarter and raised its full-year guidance.
Tiffany & Co.
TIF, -0.15%
reported a fiscal third-quarter profit that fell more than expected, and net sales and same-store sales that missed forecasts.
ow are other markets faring?
The yield on the 10-year U.S. Treasury note
TMUBMUSD10Y, +1.75%
rose 2 basis points to 1.80% after a report on jobless claims fell to the lowest level since April.
Oil futures rose as a two-day meeting of OPEC and other major crude producers got under way with the group debating deeper cuts to global output. West Texas Intermediate crude for January delivery
CLF22, +1.21%
on the New York Mercantile Exchange rose 19 cents or 0.3% to $58.62 a barrel.
Gold for February delivery
GCG20, +0.25%
slipped 70 cents or 0.1% to $1,479.50 an ounce on Comex on the positive U.S. unempoyment data.
The U.S. dollar, as measured by the ICE U.S. Dollar Index
DXY, -0.21%,
fell 0.2% at 97.475 against a basket of a half-dozen currency peers, extending a weeklong slide.
European stocks closed higher, with the Stoxx Europe
SXXP, -0.13%
trade 0.4% higher at 404.68.
In Asia overnight, the Hang Seng
HSI, +0.59%
advanced 0.6%, the China CSI 300
000300, +0.77%
rose 0.8%, while the Shanghai Composite Index
SHCOMP, +0.74%
closed 0.7% higher.
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