Wall Street notched a fresh record high on Dec. 16 as investor confidence was boosted by upbeat data from China, while cooling trade tensions between the world’s two biggest economies removed one of the hurdles for global economic growth.
Data showed China’s industrial output and retail sales growth accelerated in November, adding to optimism from the announcement of a trade deal by the two sides on Friday.
Apple Inc., among the biggest companies to benefit from the deal, rose 1.7 percent. Chipmakers that make the components for its iPhones also gained.
“This deal could be the start of a series of phased rollbacks (in tariffs), which could unlock further upside for equity markets, driven by an improvement in business confidence and a recovery in investment,” said Mark Haefele, chief investment officer at UBS Global Wealth Management.
On Sunday, U.S. Trade Representative Robert Lighthizer said the trade deal was “totally done” and expected it to nearly double U.S. exports to China over the next two years.
The benchmark S&P 500 has risen in nine of the past ten weeks on the back of improving trade sentiment, a solid third-quarter earnings season, a dovish Federal Reserve and upbeat economic indicators.
In its policy meeting last week, the Fed stood pat on interest rates, as expected, and kept the bar high for future reductions.
Technology stocks rose 1.2 percent and led gains among the 11 major S&P 500 sectors. Financials rose 1 percent after brokerage Citigroup bumped up its price targets on the big banks.
At 10:22 a.m. ET the Dow Jones Industrial Average was up 197.85 points, or 0.70 percent, at 28,333.23; the S&P 500 was up 26.19 points, or 0.83 percent, at 3,194.99; and the Nasdaq Composite was up 86.77 points, or 0.99 percent, at 8,821.65.
Boeing Co. fell 2.3 percent on reports the plane maker was considering whether to cut or halt production of its grounded 737 MAX aircraft.
Boeing’s suppliers also felt the heat, with General Electric Co. down 0.8 percent and Spirit AeroSystems Inc. tumbling nearly 4 percent.
Shares of International Flavors & Fragrances Inc. fell 7.1 percent after it said it would merge with DuPont Inc.’s nutrition and biosciences unit.
Advancing issues outnumbered decliners for a 3.43-to-1 ratio on the NYSE and a 2.42-to-1 ratio on the Nasdaq.
The S&P index recorded 62 new 52-week highs and no new low, while the Nasdaq recorded 147 new highs and 29 new lows.
By Uday Sampath Kumar