Stocks edge up; Dow closes above 29,000 for the first time

Traders work on the floor at the New York Stock Exchange in New York US Jan. 10 2020. Brendan McDermid Reuters

Traders work on the floor at the New York Stock Exchange in New York US Jan. 10 2020. Brendan McDermid Reuters

The pact eases some sanctions against China. S. agricultural, manufacturing, and energy products, along with purchases of services, by more than $200 billion over the next two years, though it also states that the parties acknowledge that purchases will be made at market prices based on commercial considerations.

"This was telegraphed well enough for the market to see through and look into the next phase and what that means", said Keith Buchanan, portfolio manager at Globalt Investments.

U.S. Treasury prices are higher, driving down both the two-year and 10-year yields by 3 bps to 1.55% and 1.79%, respectively; U.S. Dollar Index -0.2% to 97.18. It has been just 40 trading sessions since the index's last 1000-point milestone, the shortest such stretch since January 2018 when it took eight sessions for the blue chips to climb to 26000 from 25000.

The Dow Jones Industrial Average increased 90.55 points, or 0.31 percent, to 29,030.22. The Nasdaq composite improved 9,258.70 by 7.37 points or 0.1%. Of those companies, 82% have posted better-than-expected profits, according to FactSet data. The Russell 2000 index of smaller company stocks rose 0.4%.

The S&P index recorded 42 new 52-week highs and no new low, while the Nasdaq recorded 95 new highs and 10 new lows. USA equities eked out new all-time highs and Treasuries rose. The punitive tariffs for Chinese goods are still around $ 360 billion.

Earnings season has begun in the USA, with reports from Morgan Stanley and Bank of New York Mellon Corp. due Thursday.

"We see the upcoming reporting season marking a turning point after a period of weak profit growth for USA companies, one that should push equities higher this year even though the potential for further multiple expansion is modest in our view", he said in a note.

"Given the amount of speculation by the markets and commentary by officials ahead of Wednesday's signing, it is unsurprising markets have not rallied too strongly upon final signing", said Hannah Anderson, a strategist at JPMorgan Asset Management.

UnitedHealth Group Inc, the largest US health insurer, rose 2.8% as it affirmed its full-year outlook for 2020 adjusted earnings. Its stock rose 2.8%. It also binds Beijing to avoid currency manipulation to gain an advantage and includes an enforcement system to ensure promises are kept. Anthem gained 1.6%, Cigna increased 1.5% and Humana climbed 1.9%.

Technology companies also rose. The sector relies on China for sales and supply chains, and it benefits from better trade relations. Microsoft grew by 0.7% and Advanced Micro Devices by 0.8%.

Financial stocks declined as the latest round of big bank earnings largely disappointed.

Expectations for corporate profits were downbeat heading into the reporting period.

Energy stocks also fell along with the price of crude oil. Valero Energy lost 3.3%.

World shares were mostly lower on Wednesday as conflicting reports raised concerns over the likely outcome of a trade deal to be signed by the USA and China. The pickup in mortgage applications reflects heightened demand for homes and suggests many people are eager to buy a home now rather than waiting for the traditional late-February start of the spring homebuying season. Hovnanian Enterprises grew 6.4%. The company announced that weak sales of electronics, toys and household goods slowed sales growth to only 1.4% in November and December.

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