Specialist Anthony Rinaldi, left, and trader Fred DeMarco work on the floor of the New York Stock Exchange, Tuesday, Nov. 12, 2019. Stocks are opening slightly higher on Wall Street, led by gains in technology and health care companies. (AP Photo/Richard Drew)

US stocks edge toward new highs on sustained trade optimism

November 12, 2019 - 2:10 pm

Stocks headed broadly higher Tuesday, lifting the major indexes toward more all-time highs.

Health care, technology and communication services stocks powered the rally, offsetting modest losses in energy and real estate companies.

Momentum for the market has been upward for more than five weeks as worries about the U.S.-China trade war have eased, among other factors.

President Donald Trump gave markets more reason for optimism on trade during a midday speech at the Economic Club of New York. Trump said the two sides are "close," and that a "phase-one" deal on trade "could happen soon."

The remarks follow conflicting signals from U.S. and Chinese officials last week on whether the two sides have agreed to any tariff rollbacks as part of the tentative trade agreement they're negotiating.

Besides expectations for a stopgap deal on the trade war, stocks have jumped recently due to interest-rate cuts by the Federal Reserve, data showing the economy is still growingly solidly and corporate earnings reports for the summer that weren't as weak as expected.

The rising confidence in markets has meant fewer buyers piling into the safety of gold, which dropped Tuesday to its lowest price in more than three months.

Treasury yields down slightly after trading resumed following Monday's holiday in observance of Veterans Day.

KEEPING SCORE: The S&P 500 was up 0.3%, as of 2 p.m. Eastern time. Earlier, it crossed above the 3,100 level for the first time.

The Dow Jones Industrial Average climbed 43 points, or 0.2%, to 27,734, and the Nasdaq composite gained 0.5%.

Stock indexes in Europe also moved higher.

MILESTONE TERRITORY: The three major U.S. stock indexes were on track for all-time highs less than a week after notching their latest milestones. The S&P 500 and Nasdaq each set record highs last week. The Dow climbed to a new high on Monday, in large part because of a big gain for Boeing.

YIELDS: The yield on the 10-year Treasury note slipped to 1.92% from 1.93% late Friday.

It was below 1.50% in early September and has been rallying with confidence in the economy's strength.

Reports have shown that the job market is still growing, which should help households keep spending at a strong clip. Such spending makes up the bulk of the economy, and the expectation is that it can more than make up for the weakness in manufacturing that the trade war is causing.

DON'T CROSS THE STREAMS: Disney rose 1.5% on the day that its highly anticipated streaming video service, Disney Plus, launched. The service had some technical difficulties early in the morning, an indication that demand may have been higher than expected.

EARNINGS BOOST: Rockwell Automation jumped 11.4% for one of the biggest gains in the S&P 500 after reporting earnings that were better than what analysts were expecting.

It's the latest company to do so. Across the S&P 500, companies are on track to report a drop of 2.4% in third-quarter earnings per share from a year before. That's not as bad as the 4% decline analysts initially expected, according to FactSet. Just over 90% of the companies in the S&P 500 have reported their results for the summer.

IN THE WRONG GEAR: Advance Auto Parts skidded 8.4% after the auto parts retailer cut its full-year estimates for sales and income.

DRINK TO THIS: Shares in Craft Brew Alliance swelled more than twofold after Anheuser-Busch said it would buy the rest of the craft brewing company that it doesn't already own for $16.50 a share in cash.

COMING UP: On Wednesday the Federal Reserve's chairman, Jerome Powell, is due to give testimony to Congress about the U.S. economy. Most investors expect the Fed to keep interest rates on hold for now after cutting them three times since the summer.

This week the U.S. Labor Department will also give updates on both consumer and wholesale inflation. On Friday, economists expect a government report to show that retail sales returned to growth in October.

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AP Business Writer Stan Choe contributed.

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