Stocks Close at Record Highs on Signing of Trade Deal, Retail Sales and Earnings

The Dow, S&P 500 and Nasdaq close at record highs Thursdayas the United States and China sign a preliminary trade agreement.
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  1. Stocks closed at record highs Thursday after the United States and China, the world's two biggest economies, signed a preliminary trade agreement.
  2. Morgan Stanley posted stronger-than-expected fourth-quarter earnings thanks in part to solid gains from its wealth management business. Morgan Stanley is Real Money's Stock of the Day.
  3. Tesla declined after analysts at Morgan Stanley cut their rating on the electric vehicle company to underweight.

Stocks closed at record highs Thursday as the United States and China signed a preliminary trade agreement, Morgan Stanley  (MS) - Get Report reported strong earnings, and the government's retail sales report showed a slight uptick.

The so-called phase one trade agreement, signed Wednesday at the While House by President Donald Trump and China Vice Premier Liu He, commits Beijing to an extra $200 billion in purchases of American-made goods over the next two years in exchange for a rollback in some tariffs put in place by Washington over the past 18 months.

China also will pledge to "enhance" intellectual property protections - a key U.S. demand - and crack down on the practice of forced technology transfers for U.S. companies doing business in China.

Several questions over the framework of the deal, however, remain, particularly those related to China's commitment to agricultural purchases, which, combined with energy purchases, would amount to an additional $95 billion over the next two years just as China's economy is slowing.

The Dow Jones Industrial Average finished up 267 points, or 0.92%, to 29,297.64,  the S&P 500 jumped 0.84% to 3,316.81 and the Nasdaq was up 1.06% to 9,357.13.

Alphabet Inc.  (GOOGL) - Get Report saw its market cap top $1 trillion

Each of the indexes set all-time intraday highs during Thursday's session.

Cisco Systems  (CSCO) - Get Report led the Dow's advance, followed by Home Depot (HD) - Get Report and Goldman Sachs (GS) - Get Report.

Morgan Stanley posted stronger-than-expected fourth-quarter earnings thanks in part to solid gains from its wealth management business.

Morgan Stanley reported earnings of $1.30 a share, well ahead of Wall Street forecasts of 99 cents.

Charles Schwab  (SCHW) - Get Report reported a fourth-quarter profit of 62 cents a share, 2 cents below estimates. Revenue declined 2% to $2.61 billion and matched Wall Street expectations.

Tesla  (TSLA) - Get Report declined Thursday after analysts at Morgan Stanley cut their rating on the electric vehicle company to underweight, citing concerns for the sustainability of the stock's recent surge. 

XPO Logistics  (XPO) - Get Report jumped sharply Thursday after the company said it was exploring the sale or spinoff of one or more of its business units.

The logistics giant said it doesn't intend to sell or spin off its North American less-than-truckload unit.

Retail sales in December rose 0.3% from a month earlier, the Commerce Department reported, matching economists' forecasts. Sales rose to $529.6 billion as the holiday shopping season was solid, except for a few hiccups here and there like Target  (TGT) - Get Report, which said Wednesday that same-store sales rose less than expected.