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Stock Market News for Nov 18, 2019

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Benchmarks closed at record highs on Friday on U.S.-China trade deal hopes in spite of mixed economic data.

The Dow Jones Industrial Average (DJI) gained 0.8% or 222.93 points to close at 28,004.89. The S&P 500 rose 0.8% or 23.83 points to close at of 3,120.46. Meanwhile, the Nasdaq Composite Index closed at 8,540.83, rising 0.7% or 61.81 points.

The fear-gauge CBOE Volatility Index (VIX) increased 2.9% to close at 12.4. Advancers outnumbered decliners on the NYSE by a 1.84-to-1 ratio. On Nasdaq, a 1.50-to-1 ratio favored declining issues.

How Did The Benchmarks Perform?

The Dow rallied to record levels on Friday breaching 28,000 for the first time ever. The 30-stock average benchmark had crossed 27,000 just four months ago. On the other hand, the S&P 500 matched its sixth straight week of gains, which is the benchmarks’ longest such weekly streak in nearly two years.

Ten of 11 S&P 500 sectors closed in the positive territory. The healthcare sector rose the highest, by gaining 2.2%, its biggest one-day percentage rise since January, with shares of UnitedHealth Group Incorporated (UNH - Free Report) and Pfizer Inc. (PFE - Free Report) rising 5.3% and 2%, respectively.

Trade Talk Hopes Push Benchmarks to Fresh Highs

White House economic adviser Larry Kudlow on Nov 14 said that trade negotiations between the United States and China are ‘very constructive’. He reported that the negotiators are close to make an agreement, but, President Donald Trump is not ready to sign the agreement yet.

Further, Commerce Secretary Wilbur Ross said that the phase one will have as many as three phases that will be “relatively limited in scope,” but will focus on “current trade”. The signing of the phase one deal rests on China’s commitment to purchase $40 billion to $50 billion of U.S. agricultural goods.

Retail Sales Rebounded, Industrial Output Declines

U.S. retail sales rebounded in October, rising 0.3% after a contraction of 0.3% in the previous month. The report highlights a growth across the auto dealers, gas stations and Internet stores that gained 0.5%, 1.1% and 0.9%, respectively. Walmart Inc.’s (WMT - Free Report) strong online sale in the grocery segment has boosted sales in online stores.

Walmart carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

On the other hand, U.S. industrial output declined 0.8% in October, which is the largest decline since May 2018 and the third decline in output in the past four months. The United Auto Workers 40 days strike at the General Motors (GM - Free Report) sliced down auto production by 7.1%. However, autos were not the only section that weighed on the industrial output’s decline. Further, industrial capacity also slumped to 76.7 in October, which is the lowest in the last 25 months.

Weekly Roundup

Major benchmarks performed well throughout the week, the Dow rose of the fourth consecutive week.

The S&P 500 gained 0.9% for the week, posting its sixth straight weekly gain, which is also the longest streak since 2017. Additionally, the Nasdaq rose 0.8% this week, which makes the benchmark gain consecutively for the seventh week now.

News on trade talks and better-than-expected third quarter earnings results were major catalysts behind such gains throughout the week.

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