US open: Strong start to the week following temporary ceasefire in trade war
By Iain Gilbert
Date: Monday 03 Dec 2018
(Sharecast News) - Wall Street trading kicked off the week with strong gains as investors welcomed a 90-day trade truce between the US and China.
At 1520 GMT, the Dow Jones was 1.12% higher at 25,824.77, while the S&P 500 was up 1% at 2,787,72 and the Nasdaq traded 1.62% firmer at 7,448.93.
At the G20 summit over the weekend, Donald Trump and China's Xi Jinping said they would postpone the introduction of any further tariffs for the time being as they attempt to settle their differences through talks.
The US said it will hold fire on raising tariffs on $200bn-worth of Chinese goods from 10% to 25% on 1 January. Meanwhile, China said it was willing to immediately start buying a "very substantial" amount of agriculture, energy and other goods from the US in order to reduce the trade imbalance.
Neil Wilson, chief market analyst Markets.com, said: "This positive rhetoric and mood music is likely to be sustained through December as the two sides seek a deal, which is likely to mean we see a decent 'Santa rally' through December."
The US dollar was 0.19% higher against the Sterling at 0.7858, while energy shares were on the rise as oil prices jumped on the back of improving Sino-US relations, with West Texas Intermediate up 3.97% to $52.95 a barrel and Brent crude 3.73% higher at $61.68.
In corporate news, shares in pharmaceutical company Tesaro rocketed 58.81% in early trade as it agreed to be bought by GlaxoSmithKline for around $5.1bn.
In other deal news, Texas-based Nexstar Media Group was 2.92% higher at the bell after it agreed to buy Tribune Media for $4.6bn. Tribune was 9.99% higher.
On the data front, Markit's manufacturing PMI for November came in at 59.3%, a month-on-month increase of 1.6% and better than the 57.8% expected by economists.
A sub-index of new orders gained 4.7 points on last month to 62.1% and the production index picked up 0.7% to 60.6%.
Elsewhere, US construction spending dropped for a third consecutive month in October as outlays on private projects declined.
The Commerce Department revealed construction spending decreased 0.1% to $1.31trn.
September's construction outlays were revised down 0.1%.
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