Stocks End at Records on Report U.S. and China Reach Trade Pact in Principle

With the Federal Reserve holding steady on interest rates, investors turned their attention to the U.S.-China trade talks.
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  1. Stocks rose sharply Thursday after a report said U.S. negotiators have reached the terms of a phase-one trade deal with China that now awaits approval from Donald Trump.
  2. Lululemon Athletica is Real Money's Stock of the Day. The activewear company issued guidance for the holiday quarter that disappointed Wall Street.
  3. General Electric rose after UBS raised its rating on the industrial company to buy from hold.

Stocks rose sharply Thursday after a report said U.S. negotiators have reached the terms of a phase-one trade deal with China that now awaits approval from Donald Trump.

Trade advisers were meeting with the president Thursday to discuss the agreement. An announcement could come as soon as Thursday afternoon, people familiar with the matter told Bloomberg.

Trump issued a tweet earlier Thursday saying the U.S. and China were "getting very close to a big deal." 

With the Federal Reserve holding steady on interest rates, investors turned to U.S.-China trade talks as the president meets with his most senior trade advisers and mulls whether to apply or delay tariffs on around $160 billion worth of China-made goods that are set to kick in on Dec. 15.

The Wall Street Journal reported U.S. negotiators have offered to slash existing tariffs by as much as half on roughly $360 billion of Chinese-made goods as well as to cancel a new round of levies set to take effect on Sunday. The Journal cited people briefed on the matter.

The S&P 500 rose 0.86% to close at a record 3,168.57, while the Nasdaq gained 0.73% to end at 8,717.32, also a record. The Dow Jones Industrial Average ended up 221 points, or 0.79%, to 28,132, slightly below its record closing high. All  three indexes hit record intraday highs during the session.

Leading the Dow were Cisco Systems  (CSCO) - Get Report, JPMorgan Chase  (JPM) - Get Report and Goldman Sachs  (GS) - Get Report.

The U.S. central bank voted unanimously Wednesday to keep the country's benchmark interest rate unchanged while signalling little chance of a near-term move as the economy - and most importantly, jobs and inflation - continues to perform.

"Our economic outlook remains a favorable one, despite global developments and ongoing risks," Powell said . "As the year progressed we adjusted the stance of monetary policy to cushion the economy and provide some insurance. This shift has helped support the economy and has kept the outlook on track."

Lululemon Athletica  (LULU) - Get Report is Real Money's Stock of the Day. Shares tumbled after the activewear company issued guidance for the fourth quarter that disappointed Wall Street.

General Electric  (GE) - Get Report rose Thursday after analysts at UBS predicted a 2020 "inflection point" for the company and its ongoing turnaround under CEO Larry Culp.

UBS analyst Markus Mittermaier boosted his price target on GE to $14, one of the highest on Wall Street and a $1.50 increase from his previous estimate. He also lifted his rating on the shares to buy from hold, citing improvements to the industrial company's balance sheet that will lead to stronger cash flows in the coming year.

U.K. voters, meanwhile, were heading to the polls for their third general election in four years, hoping to unlock the nation's ongoing Brexit stalemate by election a government that is either committed to leave the European Union or promising to offer a second referendum on its membership in the world's biggest economic bloc.

Weekly jobless claims in the U.S. rose last week by 49,000 to 252,000, the highest level since the week ended Sept. 30, 2017, the Labor Department said.

Producer prices in the U.S. in November were unchanged, below economists' estimates of a 0.2% increase, indicating that inflation at the wholesale level remains tame.