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Stock Market News for Dec 31, 2019

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Benchmarks notched their worst decline in nearly four weeks on Monday. There wasn’t any particular catalyst behind such decline, as stocks mostly gained in the final few weeks of this year on optimism over the initial trade agreement between the United States and China.

The Dow Jones Industrial Average (DJI) fell 183.12 points or 0.6%, to close at 28,462.14 and the S&P 500 slipped 18.73 points or 0.6% to close at of 3,221.29. While, the Nasdaq Composite Index closed at 8,945.99, sliding 60.62 points or 0.7%. The fear-gauge CBOE Volatility Index (VIX) increased 9.4% to close at 14.82. Declining issues outnumbered advancing one for a 1.14-to-1 ratio on the NYSE and a 1.20-to-1 ratio on the Nasdaq favored decliners.

How Did the Benchmarks Perform?

Monday, all the three indexes performed the worst in about four weeks.

But despite the drop on Monday, the Dow has gained of 22% so far this year, while the S&P 500 rose 28.5% in the same period. The Nasdaq Composite also rose nearly 36% year-to-date.

Microsoft Corporation (MSFT - Free Report) , Visa Inc. (V - Free Report) and JPMorgan Chase & Co. (JPM - Free Report) are among the Dow’s biggest winners this year and the stocks ended in red on Monday as investors took profits. Microsoft and Visa have gained 55.2% and 42.4% this year. Visa carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The tech-laden S&P 500 also dropped largely weighed by Microsoft. Overall, the S&P index recorded 12 new 52-week highs and no new low. And, the Nasdaq recorded 56 new highs and 22 new lows.

U.S.-China May Sign Trade Deal in the Next Week

On Monday, the South China Morning Post reported that Chinese Vice-Premier Liu He is preparing to travel to Washington on Saturday, where the limited trade deal agreed by both the countries will be side. On the other hand, White House Trade Adviser Peter Navarro also said yesterday that deal is likely to be signed next week, though a confirmation would come from either President Donald Trump or the U.S. Trade Representative.

This intermediate deal will reportedly roll back some existing tariffs on Chinese imports with commitments from the Chinese administration to purchase more American agricultural goods.

Economic Data

On Monday, the government reported that the U.S. trade deficit in goods fell sharply in November. The deficit in goods fell 5.4% to $63.2 billion in November, which is the lowest level since August 2017. October’s revised figure came in at $66.8 billion. The nearly two year-long U.S.-China trade war has weighed heavily on companies, as they could not manage timely orders due to higher tariffs.

Additionally, yesterday the National Association of Realtors reported that pending home sales increased in November. The index rose 1.2% to 108.5, last month, with that the year-over-year contract signings jumped 7.4%. This housing contract activity also saw a rebound in October rising 1.1% from the previously reported drop of 1.7%.

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