U.S. Stocks Rally To Record Highs On First Trading Day Of 2020

Stocks moved sharply higher over the course of the first trading session of 2020 on Thursday, extending the substantial upward move seen last year. With the continued advance, the major averages reached new record closing highs. The major averages saw further upside going into the close, ending the day just off their highs of the session. The Dow surged up 330.36 points or 1.2 percent to 28,868.80, the Nasdaq spiked 119.58 points or 1.3 percent to 9,092.19 and the S&P 500 jumped 27.07 points or 0.8 percent to 3,257.85. The rally on Wall Street partly reflected recent upward momentum, which has helped propel stocks to new record highs despite a lack of major catalysts. Traders continue to express optimism about the potential impact of a phase one U.S.-China trade deal, with President Donald Trump saying the deal is due to be signed during a White House ceremony on January 15th. Trump said in a post on Twitter on Tuesday that he would travel to Beijing at a later date to begin talks on phase two of a trade agreement. Recent reports have indicated Chinese Vice Premier Liu He, Beijing's top trade negotiator, will be on hand to sign the phase one deal. The U.S. economy has held up relatively well in the face of the U.S.-China trade war, and the signing of the phase one deal could lift some of the lingering uncertainty hanging over some industries. In U.S. economic news, the Labor Department released a report showing initial jobless claims unexpectedly edged slightly lower from an upwardly revised level in the week ended December 28th. The report said initial jobless claims slipped to 222,000, a decrease of 2,000 from the previous week's revised level of 224,000. Economists had expected jobless claims to inch up to 225,000 from the 222,000 originally reported for the previous week. Meanwhile, the Labor Department said the less volatile four-week moving average crept up to its highest level since January of 2018. Computer hardware stocks moved sharply higher over the course of the trading session, driving the NYSE Arca Computer Hardware Index up by 2.1 percent to new record closing high. Semiconductor and software stocks also saw substantial strength on the day, with the Philadelphia Semiconductor Index and the Dow Jones U.S. Software Index jumping by 2.1 percent and 1.9 percent, respectively. Brokerage, retail and oil stocks also moved significantly higher, while considerable weakness was visible among natural gas stocks. Interest rate-sensitive utilities and commercial real estate also showed notable moves to the downside over the course of the session. Trading on Friday may be impacted by reaction to reports on manufacturing activity and construction spending as well as the minutes of the latest Federal Reserve meeting.