USA stocks rise ahead of signing of 'Phase 1' trade deal

USA stocks rise ahead of signing of 'Phase 1' trade deal

Financial firms are likely to dominate the earnings calendar in the US for another day, with firms including Goldman Sachs Group set to report their latest results.

Kicking off the fourth-quarter earnings season, JPMorgan Chase & Co rose 1.2% after reporting a better-than-expected profit on strength in its trading and underwriting businesses. United Airlines rose 1.1% and American Airlines gained 0.5%.

Technology companies also climbed.

With the trade issue entering a new stage, Wall Street is focusing on the rollout of corporate earnings reports over the next few weeks.

The Dow Jones Industrial Average, S&P 500 and Nasdaq each touched intraday record highs before losing ground in afternoon trade.

Seven of the 11 primary S&P 500 sectors turned negative at market closing, with technology down 0.6 percent, leading the laggards.

US and euro zone government bond yields rose as the trade deal marks a major step in ending a dispute that has cut global growth and boosted demand for such safe-haven assets as bonds, gold and currencies like the Japanese yen and Swiss franc.

The broad-based S&P 500 shed 0.2 per cent to 3,282.64, while the tech-rich Nasdaq Composite Index dropped 0.3 per cent to 9,250.25.

The S&P 500 posted 60 new 52-week highs and no new lows; the Nasdaq Composite recorded 160 new highs and 27 new lows.

The yield on 10-year Treasuries rose one basis point to 1.86%.Australian 10-year yields rose about three basis points to 1.24%. However, there is a risk that markets will sell the fact of the signing of the phase one trade deal so some profits could be taken off and banked from these currency upside moves leading into the event. Shares also fell in Taiwan and Southeast Asia.

Oanda's Craig Erlam said: "Details of the trade deal are starting to emerge but there's still a lot we don't know".

Several large banks were among the companies that started the last earnings season on Wall Street on Tuesday. The U.S. dropped its designation of China as a currency manipulator ahead of the signing. But Wells Fargo (WFC) saw its fourth-quarter profits plunge by more than 50% on low interest rates and litigation charges.

Citigroup (C) reported quarterly results that also beat analyst expectations, driven by a 49% surge in bond trading revenues.

The February crude contract was down 68 cents at US$57.55 per barrel and the February natural gas contract was down 5.7 cents at US$2.13 per mmBTU. It earned 15 cents on Tuesday, up to $ 58.23 per barrel. Treasury yields edged higher, while the yen fell past 110 per dollar.

Brent crude oil, the worldwide standard, gave up 11 cents to $64.38 per barrel.

Gold, considered a safe haven during political and economic turmoil, rose last week to an nearly seven-year peak of $1,610.90 an ounce after a US drone strike killed a top Iranian commander in Baghdad and Iran launched missiles against USA troops in Iraq in retaliation.

Gold rebounded, gaining $7.10 to $1,551.70 per ounce. The euro strengthened to $1.1138 from $1.1122.

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