Tech rally, trade hopes boost Wall Street to record highs
(Reuters) – U.S. stocks hit record highs on Thursday as Middle East tensions eased, optimism about a U.S.-China trade deal rose and several brokerages boosted price targets on high-profile companies.
The biggest boosts to the main indexes were Facebook Inc (FB.O), Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Alphabet Inc (GOOGL.O) and Microsoft Corp (MSFT.O) which rose between 0.7% and 1.5%.
Apple gained on twin support from data showing iPhone sales jumped more than 18% in China in December as well as a price target hike by Jefferies on exceptions of a strong finish to 2019.
Cowen Equity Research raised its price target on Alphabet, Facebook, and Twitter (TWTR.N) after its survey of U.S. ad buyers showed upbeat spending in 2020. Technology stocks .SPLRCT rose 0.9%, the most among the major S&P sectors.
After a wobbly start to the new year on fears of an all-out conflict in the Middle East, nerves eased on Wednesday as Washington and Tehran looked to defuse the crisis after Iran’s retaliatory attack following the killing of a top general.
Further aiding the sentiment, China’s commerce ministry said on Thursday that Vice Premier Liu He will sign a Phase 1 trade deal in Washington next week, raising hopes that a prolonged tariff war between the two sides will come to a close.
“While geopolitical risks can trigger bouts of short-term volatility, investors should not ignore the recent improvements in selected economic indicators and earnings,” strategists at Eastspring Investments said in a client note.
“Should the nascent recovery in the global economy continue, further upside in global markets is still possible.”
At 10:03 a.m. ET, the Dow Jones Industrial Average .DJI was up 115.20 points, or 0.40%, at 28,860.29, the S&P 500 .SPX was up 14.58 points, or 0.45%, at 3,267.63 and the Nasdaq Composite .IXIC was up 69.25 points, or 0.76%, at 9,198.49.
After a better-than-expected private payrolls report on Wednesday, investors are awaiting Friday’s jobs report as well as fourth-quarter reports. Big U.S. banks will kick off the quarterly earnings season next week.
Earnings for the S&P 500 companies are expected to drop 0.6% in their second consecutive decline, according to Refinitiv IBES data.
Shares in Kohl’s Corp (KSS.N) slid 8% after the department store operator forecast full-year earnings at the bottom end of an already lowered target. J C Penney Co Inc (JCP.N) dropped 5.8% after disappointing same-store sales numbers.
Advancing issues outnumbered decliners by a 1.43-to-1 ratio on the NYSE and a 1.81-to-1 ratio on the Nasdaq.
The S&P index recorded 55 new 52-week highs and no new lows, while the Nasdaq recorded 112 new highs and seven new lows.
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