U.S. stocks rallied for the third successive day owing to cautious optimism on the part of investors regarding a possible solution to the ongoing trade war between the United States and China. However, partial government remained a concern. All three major stock indexes ended in the green.
The Dow Jones Industrial Average (DJI) closed at 23,787.45, gaining 1.1% or 256.10 points. The S&P 500 Index (INX) rose 1% to close at 2,574.41. Meanwhile, the Nasdaq Composite Index (IXIC) closed at 6,897, climbing 1.1%. A total of 8 billion shares were traded on Tuesday, lower than the last 20-session average of 9 billion shares. Advancers outnumbered decliners on the NYSE by 3.36-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 2.16-to-1 ratio. The CBOE VIX decreased 4.4% to close at 20.47.
How Did the Benchmarks Perform?
The Dow ended in positive territory for the third successive day, its longest winning streak since late November. Notably, 26 components of the 30-stock blue-chip index finished in the green while the remaining four closed in the red. The S&P 500 closed in positive territory for the third consecutive day. The Real Estate Select Sector SPDR (XLRE), Communications Services Select Sector SPDR (XLC) and Industrials Select Sector SPDR (XLI) are major gainers with 1.7%, 1.7% and 1.4%, respectively. Notably, all 11 sectors of the benchmark index closed in the green.
The tech-heavy Nasdaq Composite also ended in the green after rallying for three straight days, due to strong performance by FAANG stocks. Shares of Facebook Inc. (FB - Free Report) and Apple Inc. (AAPL - Free Report) surged 3.3% and 1.9%, respectively. Facebook carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Positive Developments on Trade War Front
The two-day long meeting between high level delegations of the United States and China which resumed on Jan 7, has been extended for one more day. Although no broad-based agreement has appeared so far, China has already approved five genetically-modified crops for import that will mostly benefit U.S. agricultural exports.
Notably, several economists have expressed concerns of a global economic slowdown in 2019 owing to lingering trade conflict between these two largest trading nations of the world.
Reuters reported that the Chinese foreign ministry confirmed on Monday that both sides have expressed the desire to work together in order to find an amicable solution. The foreign ministry also stated that China wants to resolve trade disputes with the United States on an equal footing.
Further, U.S. Commerce Secretary Wilbur Ross said that he is very hopeful regarding the trade conflict resolution this time around. On Jan 8, President Trump tweeted that trade talks with China were going well.
Partial Government Shutdown: a Concern
The United States is facing partial government shutdown for last 17 days owing to disagreement between President Donald Trump and Democratic lawmakers over funding for a U.S.-Mexico border wall.Some government employees are likely to miss their first paycheck this week as a result of this shutdown. However, the Internal Revenue Service has announced on Jan 7 that it will process income tax refunds even during the shutdown period.
National Federation of Independent Business reported that its small-business optimism index dropped 0.4 points to a seasonally adjusted level of 104.4, lowest in 14 months.
The Department of Labor reported that U.S. job openings for the month of November fell to 6.89 million from 7.13 million in October. November’s job openings were the lowest since June.
Stocks That Made Headline
BP to Expand Operations and Production in Gulf of Mexico
BP plc (BP - Free Report) intends to boost operations at the Atlantis field in the U.S. Gulf of Mexico and has agreed to a major expansion of the field. (Read More)
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>