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S&P 500 Closes Near Record on Trade Optimism: Markets Wrap

Rita Nazareth and Claire Ballentine
S&P 500 Closes Near Record on Trade Optimism: Markets Wrap

(Bloomberg) -- The S&P 500 Index briefly surpassed its closing record amid positive signs on trade talks and as investors assessed corporate earnings.

Equities extended their weekly advance as the U.S. said it’s close to finalizing sections of the first phase of a trade deal with China. Technology shares led gains after Intel Corp.’s upbeat outlook and as Apple Inc. hit an all-time high. Amazon.com Inc. pared losses as its long-term prospects offset a profit decline. The risk-on sentiment helped push Treasuries down.

Read: The Rumbling Sound in U.S. Stocks Is the Return of Risk Appetite

Stock investors cheered signs of progress on negotiations between the world’s two largest economies, hoping they could ease a dispute that’s rattled global markets and weighed on growth. U.S. Trade Representative Robert Lighthizer, Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He spoke by phone on Friday. President Donald Trump said that “we’re doing very well with China” and “they want to make a deal very badly.”

“The news about the trade war has continued to improve,” said Michael Antonelli, managing director and market strategist at Robert W. Baird & Co. “It’s not solved, but news has been getting better. Earnings have been not as bad as people think. If this pace continues, it’s very possible earnings end up on the plus side of growth.”

Despite the market rally, the still uncertain scenario for a trade deal is seen by economists as a reason for the Federal Reserve to cut rates next week. Data on Friday showed that U.S. consumer sentiment pared gains from earlier in October, while remaining elevated. The U.S. budget deficit widened to almost $1 trillion in the latest fiscal year, surging to the highest level since 2012.

More on corporate news:

Goodyear Tire & Rubber Co. surged after analysts said that improved pricing may be a tailwind.Visa Inc. rose on forecasts that topped analysts’ projections.Juniper Networks Inc. jumped after boosting its stock buyback authorization by $1 billion as earnings beat estimates.Verizon Communications Inc. exceeded Wall Street’s expectations for profit and subscriber growth.Charter Communications Inc. climbed after the cable giant added more internet customers than expected.PG&E Corp. plunged amid concern that possible liabilities from the fire in Northern California could undermine efforts to bring the company out of bankruptcy.

Elsewhere, the pound dropped as French President Emmanuel Macron blocked the European Union’s attempt to delay Brexit for three months. That’s raised the prospect the U.K. might not know whether it will get an extension until just hours before it is scheduled to be ejected on Oct. 31, even without a deal.

Read: UBS Trims Pound Bet as BlackRock Sees ‘Never-Ending’ Uncertainty

These are some of the main moves in markets:

Stocks

The S&P 500 rose 0.4% to 3,022.55 at 4 p.m. New York time.The Dow Jones Industrial Average added 0.6%.The Nasdaq Composite Index jumped 0.7%.The Stoxx Europe 600 Index gained 0.2%.The MSCI Asia Pacific Index increased 0.1%.

Currencies

The Bloomberg Dollar Spot Index was little changed.The euro dipped 0.2% to $1.108.The British pound decreased 0.2% to $1.2825.The Japanese yen weakened 0.1% to 108.67 per dollar.

Bonds

The yield on 10-year Treasuries gained three basis points to 1.80%.Germany’s 10-year yield increased four basis points to -0.36%.Britain’s 10-year yield gained six basis points to 0.682%.

Commodities

The Bloomberg Commodity Index rose 0.2%.West Texas Intermediate crude climbed to $56.66 a barrel.Gold added 0.1% to $1,504.85 an ounce.

--With assistance from Caroline Hyde, Adam Haigh, Todd White, Samuel Potter, Yakob Peterseil and Sarah Ponczek.

To contact the reporters on this story: Rita Nazareth in New York at rnazareth@bloomberg.net;Claire Ballentine in New York at cballentine@bloomberg.net

To contact the editors responsible for this story: Jeremy Herron at jherron8@bloomberg.net, Rita Nazareth

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