S&P 500 posts biggest weekly percent gain after China-U.S. phone talks

U.S. stocks hit record closing highs again on Friday as the S&P 500 registered its biggest weekly percentage gain since early September after Chinese President Xi Jinping and his U.S. counterpart Donald Trump discussed the phase one trade deal in a phone call Friday.

President Donald Trump claimed progress on issues from trade to North Korea and Hong Kong after speaking with Chinese President Xi Jinping, dispelling fears of another escalation in the two countries’ trade war.

The S&P 500 hit a seventh straight intraday all-time high, its longest streak of intraday highs since October 2017, while the Nasdaq ended with gains for an eighth session in a row.

The Dow Jones Industrial Average rose 78.13 points, or 0.28 percent, to 28,455.09, the S&P 500 gained 15.85 points, or 0.49 percent, to 3,221.22 and the Nasdaq Composite added 37.74 points, or 0.42 percent, to 8,924.96.

The S&P 500 rose for a fourth straight week, gaining 1.7 percent for the week, its biggest weekly gain since early September.

Volume on U.S. exchanges hit the highest in a year, boosted by “quadruple witching,” in which investors unwind positions in futures and options contracts before their expiration. About 11.53 billion shares changed hands on Friday.

Nike Inc (NKE.N) was down 1.2% after the world’s largest sportswear maker reported lower-than-expected growth in revenue from North America.

A rise in consumer spending also caught investors’ eyes. Data showed that U.S. consumer spending increased 0.4 percent, adding to a string of upbeat data that have helped ease recession fears, which dogged markets earlier this year.

Early Santa Claus rally?
With six trading days remaining until the end of 2019, the S&P 500 is still 25 points away from breaking the 29.5 percent gain record in 2013. In 1997, the S&P 500 rose 31 percent.

The S&P 500 has already risen 28.5 percent this year, while the Dow and Nasdaq rose 22 percent and 34.5 percent respectively.

Since 1950, the S&P 500 has gained 1.3 percent on average in the last five trading days of the year and the first two trading days of the following year, giving it the “Santa Claus rally” moniker. In 2018, the S&P 500 rose 4.1 percent in that time period.

Phase one trade deal in progress
During the phone call between the two countries’ leaders on Friday, Xi and Trump discussed matters from trade to political affairs.

Xi stressed the phase one economic and trade deal between China and the United States benefits both sides and the whole world, and noted that the two countries reached the phase one agreement on the basis of the principle of equality and mutual respect.

In response, Trump said he is looking forward to maintaining regular communication with Xi by various means, adding he is confident that both countries can properly handle differences, and U.S.-China relations can maintain a smooth development.

The recent record run could make it harder for stocks to rally once the next earnings season begins, Todd said, noting that “there could be increased volatility.”
Advancing issues outnumbered declining ones on the NYSE by a 1.60-to-1 ratio; on Nasdaq, a 1.39-to-1 ratio favored advancers.

The S&P 500 posted 77 new 52-week highs and no new lows; the Nasdaq Composite recorded 199 new highs and 38 new lows.

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