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U.S. Pat. Stocks Continue to Move Higher



Signs of easing trade tensions between the U.S. and China continued to push stocks higher Friday, putting major US

The Dow Jones Industrial Average rose 125 points, or 0.5%, to 24495, while the S & P 500 added 0.6% and the Nasdaq Composite climbed 0.3%. The gains build on an impressive climb above the past month, as signs of a still-growing U.S. economy, and flexible Federal Reserve and progress on trade negotiations have encouraged investors. Since its Dec. 24 drough, the Dow Jones Industrial Average is up more than 12%.

New York Fed President John Williams said Friday that interest rate and balance sheet adjustments will depend on the economy's performance and added that a wider government shutdown could slow down the economy. The comments helped reassure investors that the Fed will take a slow, measured approach to the short-term interest rate hikes this year.

 Cargo ships gather in New York Harbor near the Verrazzano-Narrows Bridge in New York on Jan. 7.

Cargo ships gather in the New York harbor near the Verrazzano-Narrows Bridge in New York on Jan. 7.


Photo:
            

        Justin Lane / Shutterstock
          

Also contributing to Friday's gains is optimism in the U.S. will ratchet back tariffs on Chinese imports. The Wall Street Journal reported on Thursday that the US Treasury Secretary Steven Mnuchin proposed the idea of ​​lifting some or all tariffs on Chinese imports to advance trade talks.

A Treasury spokesman said bargaining positions "are all at the discussion stage" and that "neither Secretary Mnuchin nor Ambassador Lighthizer has made any

Trade friction has weighed down market sentiment in recent months amid concerns about the impact it would have on growth and corporate supply chains. A Federal Reserve reported this week that firms have said they have been struggling with higher input prices, partly due to tariffs.

Kevin Gardiner, global investment strategist at Rothschild Wealth Management, said that while it is less clear whether the outcome trade negotiations may be good or bad for the US economy, "which makes international trade more difficult, that puts sand on the wheels of businesses and disturbs their increasingly global supply chains has got to be bad for business."

Corporate earnings have also been a source of support for the market this week and continued to drive moves in individual companies on Friday.

SunTrust Banks
            

      
        STI 4.37%

was a big gainer among individual stocks, rising 2% after it reported an increase in revenue and a drop in costs.

            Netflix
            

      dropped 1.9% after the streaming video giant said revenue grew less than expected analysts while

            American Express
            

      moved down 2.5%, despite posting its highest annual profit and revenues.

Overall, slightly more than usual, they have been beating analysts' earnings estimates so far for the fourth quarter, according to data from Refinitive. "The Analysts' [earnings] revival momentum has gone off a cliff," said David Bowers, who heads up research at Absolute Strategy Research. "

Benchmarks in Europe, Japan, Shanghai and Hong Kong all climbed Friday, rising more than 1%. [19659002] In Europe, the trade-sensitive auto sector was one of the best performers, rising 2.3% for the day and adding to the gains of 8.7% this month after a bruising selloff in late 2018. The broader Stoxx Europe 600 climbed 1.6% around and six-week high.

Hong Kong's Hang Seng rose 1.3% amid solid gains in shares of health-care companies, while Japan's Nikkei Stock Average added 1.3%.

Riva Gold at riva.gold@wsj.com


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