Stocks up with hopes that US-China trade deal still on track

NEW YORK — Stocks climbed Wednesday and recouped some of their losses from prior days on hopes that a U.S. trade deal with China may be nearing, despite tough recent talk from President Donald Trump.

The market has swung sharply for months on every hint of progress about talks between the world’s largest economies, and the latest trigger was a report from Bloomberg News saying U.S. negotiators expect a “Phase 1” trade agreement to be completed before U.S. tariffs are set to rise on Chinese-made products Dec. 15. It comes just a day after Trump said he wouldn’t mind waiting until after the 2020 elections for a deal, a remark that officials reportedly called off the cuff but nevertheless sent markets skidding.

“The trade war will be the key driver of sentiment in the immediate few weeks,” DBS Group analysts wrote in a report.

Beyond China, Trump has been pushing ahead on trade disputes all around the world recently. On Tuesday, he proposed tariffs on $2.4 billion in French products in retaliation for a tax on global tech giants including Google, Amazon and Facebook. That follows a threat Monday to raise tariffs on steel and aluminum from Argentina and Brazil.

The global trade war has hurt manufacturers and weighed on economic growth around the world. Central banks have cut interest rates and unloaded stimulus to help spur growth. In the United States, a strong job market is also helping to prop up the economy.

KEEPING SCORE: The S&P 500 was up 0.7% as of 10 a.m. Eastern time. It was on track to recover about a third of its losses from the prior three days.

The Dow Jones Industrial Average climbed 188 points, or 0.7%, to 27,691, and the Nasdaq composite rose 0.6%.

YIELDS: Treasury yields also recouped some of their sharp drops from earlier in the week. Rising optimism on trade means less demand for safe investments, and when prices for Treasurys fall, their yields rise.

The yield on the 10-year Treasury rose to 1.75% from 1.71% late Tuesday. It was at 1.83% on Monday.

ENERGIZED: A rebound in the price of crude sent oil-related stocks to the market’s biggest gains. Energy stocks in the S&P 500 rose 1.4% for the biggest gain among the 11 sectors that make up the index. Halliburton rose 3.9%, and Devon Energy added 4.1%.

JOBS SURPRISE: A report on the U.S. jobs market came in surprisingly weak, which could raise doubts about what’s been the strongest part of the economy. Private employers added just 67,000 jobs last month, according to payroll processor ADP. That’s roughly half of October’s hiring pace and weaker than economists expected.

The more comprehensive jobs report from the Labor Department will arrive on Friday, and it will likely have a bigger impact on the market.

COMMODITIES: Benchmark U.S. crude rose $2.14, or 3.8%, to $58.20 per barrel. Brent crude, the international standard, climbed $1.95, or 3.2%, to $62.77.

Natural gas fell 2.1%, while gold and silver had more modest losses. Copper, which often moves with expectations for global economic strength, rose 1.2%.

MARKETS ABROAD: European stock indexes were higher, while Asian markets sank.

The French CAC 40 jumped 1.3%, and the German DAX returned 1.1%. The FTSE 100 in London added 0.2%.

Japan’s Nikkei 225 fell 1%, South Korea’s Kospi lost 0.7% and the Hang Seng in Hong Kong dropped 1.2%.


AP Business Writer Joe McDonald contributed from Beijing.

Stan Choe, The Associated Press