US Market rebounds on renewed U.S.-China trade-talk optimism

The US stock market finished higher on Wednesday, 04 December 2019, snapping three days of loosing streak, as investors chased for bargain hunting on renewed optimism about a potential trade deal after reports indicated the U.S. and China are moving closer to agreeing on the amount of tariffs that would be rolled back in a phase one trade deal. However, market gains capped after disappointing economic data, including a report from payroll processor ADP showing much weaker than expected private sector job growth in the month of November. At closing bell, the Dow Jones Industrial Average rose 146.97 points, or 0.53%, to 27,649.78, while the S&P 500 added 19.56 points, or 0.63%, to 3,112.76. The Nasdaq Composite grew 46.03 points, or 0.54%, to 8.566.67.

The market has swung into positive terrain on hint of progress about talks between the world's largest economies. The latest reports indicated U.S. negotiators expect a "Phase 1" trade agreement to be completed before U.S. tariffs are set to rise on Chinese products Dec. 15. The report came a day after Trump said he wouldn't mind waiting until after the 2020 elections for a deal.

 

Beyond China, President Donald Trump has been pushing ahead on trade disputes all around the world recently. On Tuesday, he proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Google, Amazon and Facebook. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil. The trade war has hurt manufacturers and weighed on economic growth around the world. Central banks have cut interest rates and unloaded stimulus to help spur growth.

Shares of chipmakers rose with prospects for a U.S. - China trade deal. Nvidia shares rose 0.9% and Micron Technology closed 2.4% higher and the PHLX semiconductor index rose 1.6%. Alphabet gained 2% after Google's parent said CEO Larry Page is stepping down and will be replaced by Sundar Pichai, currently CEO of Alphabet's Google unit.

United Airlines fell 0.8% after the airline said it will buy 50 new Airbus A321XLR aircraft and begin replacing and retiring its existing fleet of Boeing 757-200 aircraft.

ECONOMIC NEWS: US Service Sector Grows At Slower Pace In November-- US non-manufacturing index dipped to 53.9 in November after climbing to 54.7 in October, a report released by the Institute for Supply Management on Wednesday showed. A reading above 50 indicates service sector growth. The bigger than expected decrease by the headline index was partly due to a steep drop by the business activity index, which tumbled to 51.6 in November from 57.0 in October. Meanwhile, the new orders index rose to 57.1 in November from 55.6 in October and the employment index climbed to 55.5 from 53.7.

US ADP Private Sector Employment Decelerates In November-- US private sector employment increased by 67,000 jobs in November after climbing by a revised 121,000 jobs in October, according to a report released by payroll processor ADP on Wednesday. The weaker than expected job growth came as a continued increase in employment in the service-providing sector was partly offset by a loss of jobs in the good-producing sector.

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