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U.S. stocks finished Tuesday trade with modest gains on low volumes ahead of the New Year holiday on Wednesday, closing out a banner year for Wall Street.
What are major indexes doing?
The Dow Jones Industrial Average
DJIA, +0.27%
closed up 76.30 points or 0.3%, at 28,538.44, while the S&P 500 index
SPX, +0.29%
gained 9.49 points, or 0.3%, to 3,230.78. The Nasdaq Composite Index
COMP, +0.30%
rose 26.61 points, or 0.3%, to 8,972.60.
The Dow ended the year up 22.3%, its best year since 2017, while the S&P 500 saw its best year since 2013, gaining 28.9%. The Nasdaq also had its loftiest annual performance in six years after rallying 35.2% in the year.
Meanwhile, blue-chips gained 6% during the quarter and 1.7% for the month, while the S&P 500 rose 8.5% over the three-month period and 2.9% in December. The Nasdaq booked a return of 12.2% in the last three months of the year and rose 3.5% in December.
What’s driving the market today?
Stocks closed slightly higher on the back of positive news on the international trade front, with President Trump announcing on Twitter than he plans to sign a “phase-one” U.S.-China trade deal at the White House on Jan. 15.
I will be signing our very large and comprehensive Phase One Trade Deal with China on January 15. The ceremony will take place at the White House. High level representatives of China will be present. At a later date I will be going to Beijing where talks will begin on Phase Two!
— Donald J. Trump (@realDonaldTrump) December 31, 2019
Earlier Tuesday, trade adviser Peter Navarro said that the deal was “in the bank” and that the Trump administration was just waiting to review a Chinese translation of the 86-page agreement.
Stocks saw some early selling on the news after posting sharp gains since President Trump first announced the agreement in October.
“What’s striking is the sell-the-fact reaction in stocks, which suggests that this ‘skinny deal’ is finally fully priced into the markets,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
See: Trump says U.S. and China to sign ‘phase 1’ trade deal on Jan. 15
Analysts also pointed to year-end dynamics, along with the superlative returns already seen as reasons for weakness in recent days. “There’s a lot of profit taking going on, as well as tax-loss harvesting,” Keith Buchanan, portfolio manager at Globalt Investments told MarketWatch. “The reason we’re having an atypical end of the year is because we’ve had such an atypical run leading up to it.”
In U.S. economic news, the October Case-Shiller home price index showed home prices rising by 3.3% in 20 major metropolitan areas across the U.S., up from a 3.2% rise in September.
The Conference Board’s index of consumer confidence fell slightly to 126.5 in December, from a revised reading of 126.8 in November.
Looking ahead, “by any objective measure US large-cap stocks start 2020 on perilous footing,” Datatrek’s Nicholas Colas wrote in a note. “Valuations are rich. Corporate debt levels are at record highs. We have not seen any earnings growth in 4 quarters. Wall Street estimates for Q1 and Q2 2020 are way too high. And Q4 2019’s rally of 8% on the S&P is purely based off the expectation that the US/global economy can turn more like a speedboat than a battleship.”
See also: Why a missing Santa Claus rally could spell bad news for stocks in 2020
Which stocks are in focus?
Shares of Nvidia Corp.
NVDA, +1.28%
was in focus after Benchmark analyst Ruben Roy upgraded the stock to ‘buy,’ and raised his price target on the stock to $275 from $240 — 17% above its Monday closing price of $232.32. Shares rose 1.3% Tuesday.
Uber Technologies Inc.
UBER, +0.00%
and Postmates, a food delivery startup, filed a lawsuit in federal court late Monday, seeking an injunction to block California State’s new law that forces these companies to classify their drivers as full-time employees, rather than contractors. Uber shares finished the session virtually unchanged.
Shares of McDermott International Inc.
MDR, -9.79%
closed off 9.8% Tuesday following a Wall Street Journal report late Monday that the energy services company was in talks with lenders to file for bankruptcy.
Boeing
BA, -0.20%
was off 0.8% after Turkish Airlines said it had agreed a compensation deal with the plane maker over the grounding of the Boeing 737 MAX following two fatal crashes.
Apple
AAPL, +0.73%
stock gained 0.7% and Microsoft
MSFT, +0.07%
shares picked up less than 0.1%. However, the two stocks have led market higher in 2019, rallying 85.3% and 54.7%, respectively. They are the best-performing Dow stocks of the year and accounted for about 15% of the S&P 500’s overall gains for 2019.
See also: These 2 stocks dominated S&P 500 returns in 2019 — and the decade
How are other markets trading?
The 10-year Treasury note yield
TMUBMUSD10Y, +1.96%
gained close at 1.909% Tuesday, while marking the largest one-year yield decline for benchmark government paper since December 2014, according to Dow Jones Market Data.
In commodities markets, oil futures slumped in the final trading session of the year Tuesday, but logged the biggest yearly gains for both major crude benchmarks in three years. West Texas Intermediate crude for February delivery
CLG20, -0.76%
on the New York Mercantile Exchange fell 62 cents, or 1%, to end at $61.06 a barrel.
Gold futures Tuesday ended 2019 at the highest level since late September, after a strong rally for the precious metal produced the largest return in nearly a decade, despite a rally in equity indexes also. Gold for February delivery
GCG20, +0.09%
rose $4.50, or 0.3%, at $1,523.10 an ounce,
The value of the U.S. dollar fell 0.4% relative to a basket of its major trading partners, according to the ICE US Dollar index
DXY, -0.25%.
Read: Why U.S. dollar bears could be thwarted in 2020
In Europe, stocks ended the day mostly lower. The Stoxx Europe 600
SXXP, -0.08%
closed down 0.08% at 415.84, but closed out the year with a gain of 23.2%.
In Asia overnight Monday, stocks closed mixed, with China’s CSI 300
000300, +0.37%
gaining 0.4%, while Hong Kong’s Hang Seng Index
HSI, -0.46%
fell 0.5%. The CSI 300 finished the year with a 36% gain, while the Hang Seng returned 9.1% in 2019.
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