Stocks Close Firmly Positive After Deal To End Shutdown - U.S. Commentary

(RTTNews) - Following the volatility seen over the two previous sessions, stocks moved significantly higher over the course of the trading day on Friday. The major averages all climbed firmly into positive territory after ending Thursday's trading mixed.

While the major averages pulled back off their highs of the session, the Dow and the Nasdaq still ended the day at their best closing levels in well over a month.

The Dow climbed 183.96 points or 0.8 percent to 24,737.20, the Nasdaq jumped 91.40 points or 1.3 percent to 7,164.86 and the S&P 500 advanced 22.43 points or 0.9 percent to 2,664.76.

For the holiday-shortened week, the Dow and the Nasdaq both inched up by 0.1 percent, while the S&P 500 edged down by 0.2 percent.

The strength on Wall Street came after U.S. Treasury Secretary Steven Mnuchin reportedly said the U.S. and China are making "a lot of progress" in trade talks.

A report from Reuters said Mnuchin is looking forward to a meeting with Chinese Vice Premier Liu He next week, which will also include discussions on currency issues.

The comments from Mnuchin conflict with remarks by Commerce Secretary Wilbur Ross, who told CNBC on Thursday the U.S. is "miles and miles" from a trade deal with China.

"Frankly, that shouldn't be too surprising," Ross said in an interview on CNBC's "Squawk Box," noting the U.S. and China have "lots and lots of issues."

Stocks remained firmly positive as President Donald Trump announced an agreement to end the record-setting government shutdown.

Trump revealed in a speech from the White House rose garden that lawmakers will vote later today on legislation to fund the shuttered parts of the government until February 15th.

The bill will not include money for Trump's controversial border wall, which was the issue that led to the longest government shutdown in U.S. history.

Trump indicated that the three weeks of funding provided by the legislation will give lawmakers time to negotiate on the contentious issue of border security.

"Many disagree, but I really feel that, working with Democrats and Republicans, we can make a truly great and secure deal happen for everyone," Trump said.

With the announcement, Trump seemed to give in to Democratic demands to re-open the government before negotiating on border security.

However, if an agreement on border security is not reached by February 15th, Trump suggested the government could shut down again or he could declare the situation on the border a national emergency.

Sector News

Gold stocks showed a substantial move to the upside on the day, driving the NYSE Arca Gold Bugs Index up by 3.8 percent.

The rally by gold stocks came amid a sharp increase by the price of the precious metal, with gold for February delivery soaring $18.30 to $1,298.10 an ounce.

Considerable strength was also visible among computer hardware stocks, as reflected by the 3.5 percent spike by the NYSE Arca Computer Hardware Index.

Hard drive maker Western Digital (WDC) posted a standout gain after reporting fiscal second quarter earnings that missed analyst estimates but forecasting stronger second half sales.

Oil service stocks also moved notably higher amid an increase by the price of crude oil, resulting in a 3.1 percent jump by the Philadelphia Oil Service Index.

Semiconductor, steel, and chemical stocks also significant strength on the day, while utilities stocks were among the few groups to buck the uptrend.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved to the upside trading on Friday. Japan's Nikkei 225 Index jumped by 1 percent, while Hong Kong's Hang Seng Index surged up by 1.7 percent.

European stocks also moved mostly higher on the day, although the U.K.'s FTSE 100 Index bucked the uptrend and edged down by 0.1 percent. The French CAC 40 Index and the German DAX Index shot up by 1.1 percent and 1.4 percent, respectively.

In the bond market, treasuries moved back to the downside following the strength seen in the previous session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.1 basis points to 2.753 percent.

Looking Ahead

Next week, the Federal Reserve's monetary policy announcement is likely to be in focus, although the central bank is widely expected to leave interest rates unchanged.

The Labor Department's monthly jobs data is also likely to attract attention along with reports on consumer confidence, pending home sales, and manufacturing activity.

Earnings news will also continue to drive trading, with Caterpillar (CAT), Pfizer (PFE), Verizon (VZ), Apple (AAPL), AT&T (T), McDonald's (MCD), Facebook (FB), Microsoft (MSFT), Amazon (AMZN), and Exxon Mobil (XOM) among a slew of big-name companies due to report their quarterly results.