Wall Street begins 2020 with new records in China, catalyses economy and trade hopes
Trader
Optimism fueled in China as the fresh economy stimulates in the apogee of an improved global outlook and easing trade tensionswith Wall Street reaching major indexes recorded on top to open new year on Thursday.
China's central bank said on Wednesday it would cut the amount of cash that all banks musthold as reserves, the eighth such cut since early 2018. The move to inject freshstimulus into the Chinese economy boosted equity markets around the globe.
The benchmark S&P 500 hit its 11th record high in 14 sessions and posted its largestdaily percentage gain in three weeks. The Dow registered its biggestsuch gain in almostfour weeks, and the Nasdaq its greatestin nearly three months.
Economicstimulus inChina, along with the easing oftradetensions between Washington and Beijing, has bolstered optimism that the global economy will accelerate in2020.
"The market's been up all day because of thenews thatChinais out there with monetary easing," said Tim Ghriskey, chief investmentstrategistat Inverness Counsel inNewYork. "With thetradedeal as a backdrop, it's a positive factor."
Among the S&P 500's sectors, technology and industrials, both of which have high exposure to the Chinese economy, rose more than 1 per centand led in percentage gains. Shares of Apple Inc, which have been a bellwether oftradesentiment, ended 2.3 per centhigher and surpassed $300.
The lengthy rally onWallStreet has prompted some concerns that USstocks are vulnerable to a pullback, especially if economic growth does not pick up as much as expected or if US-Chinatradetensions reignite.
"Large-cap equities are priced for perfection," said Peter Cecchini, global chief marketstrategistat Cantor Fitzgerald inNewYork. "It feels like we're wildly overbought given the risks that we see."
The Dow Jones Industrial Averagerose 330.36 points, or 1.16 per cent, to 28,868.8, the S&P 500gained 27.07 points, or 0.84 per cent, to 3,257.85 and the Nasdaq Compositeadded 119.59 points, or 1.33 per cent, to 9,092.19.
Adding to positive economic sentiment, data from the USLabor Department showed the number of Americans filing claims for jobless benefits edged lower lastweek.
Other data from GreaterChinashowing that gross gaming revenue in Macau fell less than expected in December boosted shares of UScasino operators. Shares of Wynn Resorts Ltd, Las Vegas Sands Corpand Melco Resorts & Entertainment Ltd rose between 2 per centand 4 per cent.
Advancing issues outnumbered declining ones on the NYSE by a 1.74-to-1 ratio; on Nasdaq, a 1.41-to-1 ratio favoured advancers.
The S&P 500 posted 59new52-week highs and onenewlow; the Nasdaq Composite recorded 115newhighs and 15newlows.
Volume on USexchanges was 7.61 billion shares, compared to the 6.85 billion-share average for the full session over the last20 trading days.