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Stock Market News for Feb 7, 2020

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Benchmarks closed in the green for the fourth-straight day on Thursday as China announced to halve tariffs on some U.S. goods from Feb 14.

The Dow Jones Industrial Average (DJI) rose 88.92 points or 0.3%, to close at 29,379.77 and the S&P 500 rose 11.09 points or 0.3% to close at of 3,345.78. While, the Nasdaq Composite Index closed at 9,572.15, gaining 63.47 points or 0.7%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.3% to close at 14.96. Advancing issues outnumbered declining one for a 1.12-to-1 ratio on the NYSE and a 1.08-to-1 ratio on the Nasdaq favored advancers.

How Did the Benchmarks Perform?

China’s move to halve extra tariffs on some U.S. goods helped the major benchmark’s rally for the fourth consecutive days. Eight of the 11 S&P 500 sectors ended in the positive, led by a 0.6% gain from consumer staple stocks. Additionally, positive U.S. economic data have boosted the investors’ sentiments and overshadowed worries arising from China’s virus crisis.

However, the impact of coronavirus outburst in China is constantly weighing corporate reports and upcoming quarter outlook.

Chipmaker like QUALCOMM Incorporated (QCOM - Free Report) has flagged potential threat to the mobile phone industry from the outbreak. Shares of QUALCOMM declined 0.3% on Thursday. The company carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Overall, the S&P index recorded 58 new 52-week highs and no new lows. On the other hand, Nasdaq recorded 98 new highs and 28 new lows.

China to Halve Tariffs on Some U.S. Goods

On Thursday, China announced that it will reduce half tariffs on about $75 billion U.S. goods. The decision to cut tariffs was synchronized with America reducing tariffs on roughly $120 billion worth of Chinese products, as per China’s finance ministry. Reduced tariffs will be effective from Feb 14 as part of its phase-one trade resolution.

With trade tensions subsiding between the United States and China, the later had promised to purchase U.S. goods and services worth $200 billion in the next two year. However, fears of the novel coronavirus widespread could create obstruction in trade deal. The Chinese ministry in its statement said that the move was “in order to promote the healthy and stable development of Sino-U.S. economic and trade relations.”

Upbeat Economic Data

On Thursday, the government reported that seasonally adjusted initial claims for the Week ending Feb 1, came in at 202,000. A decrease of 15,000 from the previous week’s revised figure of 217,000. This follows the better-than-forecast private payrolls numbers from ADP and Moody’s Analytics released on Feb 5. The investors keenly wait for the U.S. government’s monthly jobs report scheduled on Friday.

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