US stocks rise ahead of signing of 'Phase 1' trade deal
NEW YORK (AP) — Stocks rose in early trading on Wall Street Wednesday ahead of the signing of an initial trade deal between the U.S. and China.
President Donald Trump and China's chief negotiator, Liu He, are scheduled to sign the “Phase 1” deal that will ease some sanctions on China. Beijing will also step up its purchases of U.S. farm products and other goods. The initial agreement is a key step toward de-escalating an 18-month long trade conflict between the world’s largest economies.
Both nations will have to deal with some of the more contentious trade issues as they move ahead with negotiations. Punitive tariffs will remain on Chinese goods as talks continue.
Health care stocks led gains in the early going. Investors cheered a solid fourth-quarter earnings report from UnitedHealth Group.
Technology companies also climbed. The sector is reliant on China for sales and supply chains and benefits from progress in trade relations.
Banks were broadly lower after Bank of America and Goldman Sachs reported weaker profits.
KEEPING SCORE: The S&P 500 index rose 0.3% as of 10 a.m. Eastern time. The Dow Jones Industrial Average rose 101 points, or 0.4%, to 29,042. If the gains hold, the Dow would have its first close above 29,000 points. The Nasdaq rose 0.4%. The Russell 2000 index of smaller company stocks rose 0.3%.
OFF THE MARK: Target fell 6.1% after a disappointing holiday shopping season prompted the retailer to cut its forecast for a key sales measure in the fourth quarter. The company said weak sales of electronics, toys and home goods crimped sales growth to just 1.4% in November and December.
WANING INTEREST: Bank of America fell 2.2% after reporting a drop in fourth-quarter profits because of the rapid decline of interest rates in late 2019. The bank is particularly impacted by movements in interest rates since it sells a range of consumer banking services, and its balance sheet is more aligned with short-term bonds and other securities.
HEALTHIER RESULTS: UnitedHealth Group rose 3% after the nation’s largest health insurer reported surprisingly good fourth-quarter profits. The company covers more than 49 million people and its revenue rose 4% on a mix of insurance premiums and growth from urgent care and surgery centers.