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Wall Street ekes out gains as investors await U.S.-China trade clarity

Published 11/18/2019, 04:35 PM
© Reuters. A trader works on the floor at the NYSE in New York
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By Sinéad Carew

NEW YORK (Reuters) - Wall Street's three main indexes on Monday barely extended the previous session's closing records as investors waited for concrete progress on U.S.-China trade relations after mixed headlines.

The market appeared to welcome Washington's extension for U.S. companies to do business with Huawei after the Chinese telecommunications equipment maker was put on a U.S. blacklist in May.

But investors were concerned about a CNBC report that the mood in Beijing over the potential for a trade deal was pessimistic due to President Donald Trump's reluctance to roll back tariffs.

This was after Chinese state media said on Saturday that the two sides had "constructive" trade talks, after White House economic adviser Larry Kudlow said they were close to a deal.

"Markets are very focused on trade because it's still not clear whether or not the U.S. and China can reach an agreement. If it was easy to reach an agreement they would've done so many months ago," said David Lefkowitz, senior equity strategist at UBS Global Wealth Management.

"At least for today there's not a lot in terms of market moving data or information ... There's no reason to buy or sell aggressively."

The Dow Jones Industrial Average (DJI) rose 31.33 points, or 0.11%, to 28,036.22, the S&P 500 (SPX) gained 1.57 points, or 0.05%, to 3,122.03 and the Nasdaq Composite (IXIC) added 9.11 points, or 0.11%, to 8,549.94.

"Investors are being patient because they don't want to chase new all-time highs too far until they have clarity on trade," said Michael O’Rourke, chief market strategist at JonesTrading in Stamford, Connecticut.

Seven of the 11 major S&P 500 sectors were trading higher, with defensives such as consumer staples (SPLRCS) and real estate <.SPLRCR> leading the percentage gains.

The energy sector (SPNY) was the biggest percentage loser dropping 1.33% as oil prices fell.

Trading was relatively slow with 6.55 billion shares changing hands on U.S. exchanges compared with the 6.93 billion average in the last 20 sessions.

"We're sort of in a vacuum of information and news. That's why the market is very sensitive to what's happening on the trade front," said Lefkowitz of UBS, noting that the earnings season was mostly done.

Later this week, the Federal Reserve will release minutes from its latest policy meeting, where the central bank cut interest rates for the third time this year. Also ahead are results from U.S. retailers, including Home Depot Inc (N:HD), Kohl's Corp (N:KSS) and Target Corp (N:TGT).

Coty Inc (N:COTY) gained 2.60% after the cosmetics maker said it would pay $600 million for a majority stake in Kylie Jenner's make-up and skincare businesses.

© Reuters. A trader works on the floor at the NYSE in New York

The S&P 500 posted 42 new 52-week highs and no new lows; the Nasdaq Composite recorded 103 new highs and 126 new lows.

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