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U.S. stocks advanced on Thursday as a published report that the United States was considering lifting tariffs on Chinese imports lifted investor sentiment.

U.S. Treasury Secretary Steven Mnuchin discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff rollback during trade discussions scheduled for Jan. 30, the Wall Street Journal reported on Thursday, citing people familiar with the internal deliberations.

Stocks spiked higher after having posted modest gains in early afternoon trading, though they pared gains slightly after a Treasury spokesperson told CNBC that Mnuchin had not made any such recommendations.

Industrial stocks, which have been sensitive to trade developments, jumped 1.7 per cent after the report. They had earlier erased early losses as shares of defence contractors Northrop Grumman Corp and Lockheed Martin Corp rose after President Donald Trump unveiled a revamped U.S. missile defense strategy.

Shares of Apple Inc., which had previously warned of weaker sales in China, rose 0.6 per cent.

The S&P 500 financial index rebounded to trade 0.5 per cent higher after having dropped as much as 1 per cent after Morgan Stanley reported a lower-than-expected quarterly profit. The investment bank’s shares were 4.5 per cent lower.

With Thursday’s gains, the financial index has posted gains for seven straight sessions.

“The expectations bar has been lowered coming into earnings season,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Conn. “The banks’ numbers weren’t that great, aside from Bank of America and Goldman Sachs. But they’re holding their ground.”

The Dow Jones Industrial Average rose 163.01 points, or 0.67 per cent, to 24,370.17, the S&P 500 gained 19.86 points, or 0.76 per cent, to 2,635.96 and the Nasdaq Composite added 49.77 points, or 0.71 per cent, to 7,084.46.

Canada’s main stock index also rose on Thursday, extending a winning streak.

Bank stocks led a 0.8-per-cent rise in the financial sector. Bank of Nova Scotia was up 1.2 per cent, while Toronto-Dominion Bank and Bank of Montreal rose 1 per cent and 0.9 per cent, respectively.

Materials stocks rose 1 per cent, led by a 3.1-per-cent increase in Norbord Inc. Nutrien Ltd. was up 2.9 per cent, while Methanex Corp finished 2.7 per cent higher.

Leading the index were Husky Energy Inc., up 12.4 per cent, Crescent Point Energy Corp., up 4.5 per cent, and Canada Goose Holdings Inc., higher by 4.5 per cent.

Lagging shares were MEG Energy Corp., down 35.6 per cent, Peyto Exploration & Development Corp., down 10.7 per cent, and Aurora Cannabis Inc., lower by 10.5 per cent.

MSCI’s gauge of stocks across the globe gained 0.20 per cent.

Some investors took heart from Beijing’s confirmation that Chinese Vice Premier Liu He will head to the United States on Jan. 30 for more negotiations with Washington. Recent talks to resolve a protracted trade battle between the U.S. and China brought little progress.

Adding to concerns was legislation introduced by U.S. lawmakers on Wednesday that would ban the sale of U.S. chips or other components to Huawei or other Chinese telecommunications equipment makers that violate U.S. sanctions or export control laws.

That came shortly before the Wall Street Journal reported federal prosecutors were investigating allegations that Huawei stole trade secrets from U.S. businesses.

European banks tumbled after France’s Societe Generale issued a profit warning, and carmakers skidded after U.S. Senate Finance Committee Chairman Charles Grassley said he thought President Donald Trump was “inclined” to impose tariffs on European cars.

Sterling firmed toward a two-month high against the dollar. It was last trading up 0.7 per cent at $1.297.

As expected, British Prime Minister May narrowly won a confidence vote late Wednesday and invited other party leaders for talks to try to break the impasse on a Brexit agreement.

An outline for a Brexit Plan B is due by next Monday and markets are currently assuming that with no easy way forward for May she will have to extend the date of Britain’s exit from the European Union past the scheduled March 29.

“Risk assets are performing well as of late, despite what’s happening with the Brexit situation. The confidence vote was a positive step for May,” said Charlie Ripley, senior investment strategist at Allianz Investment Management in Minneapolis.

U.S. Treasury yields ticked up as better-than-expected economic data offset the trade tensions between China and the United States, holding down safe-haven bids for U.S. government debt.

Benchmark 10-year notes last fell 1/32 in price to yield 2.7325 per cent, compared with 2.729 percent late on Wednesday.

Oil prices steadied on Thursday, boosted by a rebound in U.S. equities and news that OPEC sharply curtailed production in December, after earlier losses on fears about surging U.S. crude output and weakening global demand.

Brent crude oil futures slipped 14 cents to settle at $61.18 a barrel after trading as low as $60.04 intraday. U.S. crude futures fell 24 cents to settle at $52.07 a barrel, up from a low of $50.98.

The Organization of the Petroleum Exporting Countries, in its monthly market report, cut its forecast for average daily demand for its crude in 2019 to 30.83 million barrels, down 910,000 bpd from the 2018 average.

However, OPEC also said it cut oil output by 751,000 bpd in December before a new accord to limit supply took effect, suggesting that producers have made a strong start to averting a glut in 2019.

The group and its allies plan to meet on April 17-18 in Vienna to review the supply reduction deal that began in January.

“One thing we’ve seen in the past - and I think we’ll see it again - is that when OPEC over the last couple of years has decided to cut, they’ve followed through,” said Tony Headrick, energy market analyst at St. Paul, Minnesota, commodity brokerage CHS Hedging LLC.

Reuters

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 28/03/24 10:16am EDT.

SymbolName% changeLast
MS-N
Morgan Stanley
+0.5%93.97
BNS-T
Bank of Nova Scotia
+0.43%69.72
BMO-T
Bank of Montreal
+0.37%131.26
NTR-T
Nutrien Ltd
+0.71%73.3
AAPL-Q
Apple Inc
-1.21%171.21
MX-T
Methanex Corp
-1.01%60.48
CPG-T
Crescent Point Energy Corp
+0.37%10.99
GOOS-T
Canada Goose Holdings Inc
+3.09%16.33
ACB-T
Aurora Cannabis Inc
-3.26%6.23
MEG-T
Meg Energy Corp
-0.42%30.72

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