Investors have become notably more hopeful about an eventual deal, a sharp reversal from previous months
Updated on: January 8,2019 / 4:16 PM
/ CBS/AP
New York – U. S. stocks traded higher Tuesday as industrial and internet companies rose, and the major stock indexes notched their first three-day winning streak since November.
Even though the latest round of trade talks between the U. S. and China ended without word of progress, investors were heartened that there were no evident signs of setbacks either.
Talks with China are going very well!
The S&P 500 index rose 25 points, or 1 percent, to close at 2,574. The Dow Jones industrials picked up 256 points, or 1.1 percent, ending at 23,787. Early in Tuesday’s trading, the Dow jumped as much as 333 points.
The Nasdaq composite gained 74 points, or 1.1 percent, to finish at 6,897. The Russell 2000 index of smaller-company stocks added 19 points, or 1.4 percent, closing at 1,425.
Railroad operator Union Pacific jumped 8.8 percent to close at $150.75 after it named an industry veteran to a top executive position. AutoNation fell 3.9 to $36.18 after predicting a weak year for auto sales.
There was no evidence Tuesday that the U. S. and China made significant progress in their latest round of trade talks, and experts say it will take months for them to resolve the causes of the trade war, which include disagreements over Beijing’s handling of technology and intellectual property.
But investors have become notably more optimistic about an eventual deal, a sharp reversal of the concerns that helped send stocks plunging in October and December. An agreement between the two biggest economic powers in the world could remove a major obstacle to global economic growth.
Kate Warne, an investment strategist for Edward Jones, said the market’s large moves reflect investors’ questions about major issues including economic growth, the threats of recession and trade tensions, and rising interest rates. She said it’s normal for stocks to change course as traders grapple with those issues on a day-to-day basis.
« You have new information that’s driving stock prices both higher and lower, and that’s pretty typical when there’s uncertainty and there’s a lot of new information coming into the market, » she said.
Warne added that trading on Wall Street is typically light during the holidays, and that can exaggerate market moves up or down.
Wells Fargo Investment Institute expects the U. S.-China trade talks will continue to be a focus for investors. « Since formal talks have only just begun, we expect this trade-related narrative to remain with the markets for some time, » the firm said in a report. « That said, we expect risks related to tariff escalation to remain contained so long as talks remain productive and progressive. »
Oil prices also continued to rally. U. S. crude was on track to rise for the eighth day in the last nine and jumped 2.3 percent to $49.71 per barrel in New York. Brent crude, used to price international oils, was up 1.7 percent to $58.33 a barrel in London.
U. S. crude dropped from $76 a barrel in early October to about $42 a barrel on Dec.
