Stock market news: December 12, 2019

Emily McCormick

Stocks resurged Thursday afternoon after Bloomberg reported that U.S. negotiators had reached terms of a phase one trade deal that now awaits approval from President Donald Trump.

An official announcement could come as soon as later this afternoon, according to Bloomberg, citing unnamed people familiar with the matter.

The S&P 500 and Nasdaq each closed at fresh record highs. The Dow ended more than 200 points higher, and components JPMorgan (JPM), United Technologies (UTX), Microsoft (MSFT), Nike (NKE) and Apple (AAPL) each hit record intraday highs during the session.

Here’s where the markets settled at the end of regular equity trading Thursday:

  • S&P 500 (^GSPC): +0.85%, or 26.89 points

  • Dow (^DJI): +0.79%, or 220.42 points

  • Nasdaq (^IXIC): +0.73%, or 63.27 points

  • 10-year Treasury yield (^TNX): +10.4 bps to 1.894%

  • Gold (GC=F): -0.11% to $1,473.40 per ounce

Earlier in the session, stocks had jumped, before paring some gains, after Trump tweeted that the U.S. and China were closing in on a trade deal.

Minutes after market open, Trump said in a Twitter post said the U.S. and China were “Getting VERY close to a BIG DEAL with China. They want it, and so do we!”

Stocks, which had been little changed in early trading, jumped after the comment.

The upbeat rhetoric comes just days before a December 15 de facto deadline, on which date tariffs on about $156 billion worth of Chinese imports are set to take effect. Negotiators from both sides have remained in touch in recent days, according to a Bloomberg report citing Chinese Ministry of Commerce spokesperson Gao Feng. And the Wall Street Journal reported later Thursday that U.S. negotiators have offered to halve existing tariffs on Chinese imports and cancel Sunday’s impending round of levies as part of a potential first phase trade deal.

Earlier, investor attention had turned mostly overseas, where the UK’s general election was underway and the European Central Bank (ECB) released its first rate decision under newly installed President Christine Lagarde.

The ECB on Thursday decided to keep its main refinancing rate and deposit facility rate unchanged at 0% and -0.5%, respectively. It also kept its marginal lending facility rate steady at 0.250%. This outcome had been widely expected by consensus economists.

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 9, 2019. REUTERS/Brendan McDermid
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 9, 2019. REUTERS/Brendan McDermid

The central bank’s monetary policy statement was left virtually unchanged from the October statement, affirming that the ECB will keep rates rates will remain “at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon.”

The ECB also reiterated its program to repurchase bonds at a monthly rate of 20 billion euros, or $22 billion. This had been one of the final stimulus moves launched by Lagarde’s predecessor Mario Draghi to jumpstart the flagging eurozone economy.

Meanwhile, UK voters headed to the polls Thursday for the country’s third general election in less than five years to decide on a total of 650 Members of Parliament (MPs.) The next election had previously not been set to take place until 2022, but MPs had voted for this December’s election in October as turmoil around Brexit continued.

The election serves as an opportunity for Prime Minister Boris Johnson to win a Parliamentary majority in order to enact his Brexit plan, with both Johnson and predecessor Theresa May having so far failed to convene enough support for any exit deals among their MPs. Johnson has claimed he would deliver Brexit by January 31 if his Conservative party wins a majority.

Polls opened at 2 a.m. ET on Thursday and continued until 5 p.m. ET. The U.K. exit poll, which has been prescient in calling the general election results in recent years, suggested a majority win of 368 seats for the Conservative seats, an increase from the 298 the party held previously. The pound jumped against the euro and dollar after the exit poll results were released.

ECONOMY: Initial unemployment claims jump to a two-year high

New unemployment claims in the U.S. rose to the highest level since September 2017 last week, according to the Labor Department’s latest weekly report Thursday.

Initial jobless claims rose to a seasonally adjusted level of 252,000 for the week ended December 7, well above the prior week’s unrevised level of 203,000. Consensus economists had expected new unemployment claims to total 214,000. The latest report brought the four-week moving average of new unemployment claims up by 6,250 to 224,000.

Continuing unemployment claims, however, unexpectedly fell to 1.667 million for the week ended November 30, down from the 1.698 million from the previous week.

A closely watched measure of underlying producer price trends came in lower than expected in November, reaffirming persistently lower inflationary pressures in the U.S.

The headline producer price index (PPI) was flat month over month in November after rising 0.4% in October, the Bureau of Labor Statistics said Thursday. Consensus economists had expected producer prices to rise by 0.2% during the month. Over last year, headline PPI rose just 1.1%, versus a 1.3% gain expected.

Excluding volatile food and energy prices, the PPI fell 0.2% month over month, versus a gain of the same magnitude expected. The PPI excluding food, energy and trade services prices was flat, while a rise of 0.2% was anticipated. This measure of PPI rose just 1.3% over last year in November, slowing from a 1.5% annual gain in October.

Splitting up has been the predominant trend of the past 10 years.
Splitting up has been the predominant trend of the past 10 years.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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