Off The Wire
Wall Street at record high on trade optimism, Apple boost
(Reuters) - U.S. stocks hit record highs on Thursday as Middle East tensions eased, optimism about a U.S.-China trade deal firmed and several brokerages boosted price targets on high-profile companies.
Apple Inc (AAPL.O) gained 1.4% 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 expectations of a strong finish to 2019.
After a wobbly start to the new year on fears of an all-out conflict in the Middle East, nerves eased as Washington and Tehran looked to defuse the crisis after Iran’s retaliatory attack following the U.S. killing of a top Iranian general.
“We’ve got an easing in geopolitical tensions which is supporting risk assets,” said Paul Danis, chief global strategist at wealth manager Brewin Dolphin.
“Trump is focused on the (2020 U.S. presidential) election and he wants to avoid an escalation (with Iran) that would push oil price higher and hurt the voters.”
In another support to stocks, China’s commerce ministry said Vice Premier Liu He will sign a Phase 1 deal in Washington next week.
President Donald Trump said his administration will start negotiating the Phase 2 trade agreement soon but that he might wait to complete any agreement until after November’s presidential election.
At 12:51 p.m. ET, the Dow Jones Industrial Average .DJI was up 174.91 points, or 0.61%, at 28,920.00, the S&P 500 .SPX was up 15.35 points, or 0.47%, at 3,268.40 and the Nasdaq Composite .IXIC was up 48.51 points, or 0.53%, at 9,177.75.
Among the weak spots was the department store operator Kohl’s Corp (KSS.N), which slid 9.2% after reporting lower holiday season sales and warned of full-year earnings coming in at the bottom end of an already lowered forecast.
Smaller rival J.C. Penney Co Inc (JCP.N) tumbled 11.3% after disappointing same-store sales numbers.
With the fourth-quarter earnings season kicking off next week, analysts expect profits for S&P 500 companies to drop 0.6% in their second consecutive quarterly decline, according to Refinitiv IBES data.
Advancing issues outnumbered decliners by a 1.27-to-1 ratio on the NYSE and a 1.33-to-1 ratio on the Nasdaq.
The S&P index recorded 75 new 52-week highs and no new lows, while the Nasdaq recorded 140 new highs and 10 new lows.
Reporting by Sruthi Shankar and Susan Mathew in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Maju Samuel