Dow, S&P 500 edge to records after US-China trade deal signed

VIDEO: REUTERS
US President Donald Trump (left) shakes hands with Chinese Vice-Premier Liu He during a signing ceremony for "Phase One" of the US-China trade agreement.
US President Donald Trump (left) shakes hands with Chinese Vice-Premier Liu He during a signing ceremony for "Phase One" of the US-China trade agreement.PHOTO: REUTERS
A cargo ship loaded with containers berths at a port in Qingdao in China's eastern Shandong province.
A cargo ship loaded with containers berths at a port in Qingdao in China's eastern Shandong province.PHOTO: AFP

NEW YORK (AFP) - The Dow and S&P 500 edged to records on Wednesday (Jan 15) following a volatile session marked the signing of the long-awaited US-China trade agreement.

The Dow Jones Industrial Average gained 0.3 per cent to finish at 29,030.22, and the broad-based S&P 500 added 0.2 per cent to 3,289.29.

Meanwhile, the tech-rich Nasdaq Composite Index climbed 0.1 per cent to end at 9.258.70.

Analysts said the choppy trading session reflected worries about lofty US stock valuations following the market's surge since the fall.

"We've been on a tear since mid-October," said Briefing.com analyst Patrick O'Hare, who said investors likely will wait for more earnings reports from big companies before moving significantly further.

"It's going to take a lot of good new news to get the market to take another leg higher," he said.

The trade deal between the world's dominant economic powers called off some US tariffs that had been planned on Chinese goods, and obliged China to beef up purchases of American crops and other exports and provide intellectual property protections for US technology.

Investors have cheered the deal following nearly two years of conflict in which US-China trade tensions occasionally flared, pressuring stocks.

Still, Oxford Economics described the agreement as a "fragile truce," warning that "while the deal is a step in the right direction, further tariff rollbacks should not be expected until after the elections, and broken promises could lead to tariffs snapping back in the coming months."

 

Among individual companies, Goldman Sachs dipped 0.2 per cent as it reported lower fourth-quarter due in part to a one-time charge of US$1.1 billion for legal costs connected to probes into the bank's role in the 1MDB scandal.

Among other companies reporting results, Bank of America fell 1.8 per cent and UnitedHealth Group gained 2.8 per cent.

Target plunged 6.6 per cent after the big-box retailer reported disappointing sales for the critical holiday shopping season.

Target's comparable sales grew just 1.4 per cent in November and December, with weakness in electronics, toys and some other categories weighing on performance.