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Wall St hits record highs on optimism

Caroline Valetkevitch
Apple gained 1.7 per cent with data showing iPhone sales jumped more than 18 per cent in China

US stocks have hit record highs as optimism about a US-China trade deal firms and with Apple and other market heavyweights posting strong gains.

Easing Middle East tensions added to Thursday's bullish sentiment.

Apple Inc gained 1.7 per cent on twin support from data showing iPhone sales jumped more than 18 per cent in China in December, as well as a price target hike by Jefferies on expectations of a strong finish to 2019.

The S&P 500 technology sector rose 0.9 per cent, the top gainer among sectors.

The financial index was up 0.62 per cent after bullish comments on Citigroup Inc and Goldman Sachs Group Inc ahead of their earnings.

After a wobbly start to the new year on fears of all-out conflict in the Middle East, nerves eased as Washington and Tehran looked to defuse the crisis after Iran's retaliatory attack following the US killing of a top Iranian general.

Investors have had resolution on the trade front and an economic environment that is keeping interest rates low, which has kept the market trending higher, said Rick Meckler at Cherry Lane Investments in New Jersey.

"We had a brief pause here about Iran but even that situation, in investors' minds, is resolved."

In another support to stocks, China's commerce ministry said Vice Premier Liu He will sign a Phase 1 trade deal in Washington next week.

President Donald Trump said his administration will start negotiating the Phase 2 agreement soon but he might wait to complete any agreement until after November's presidential election.

The Dow Jones Industrial Average rose 191.74 points, or 0.67 per cent, to 28,936.83, the S&P 500 gained 18.21 points, or 0.56 per cent, to 3,271.26 and the Nasdaq Composite 61.75 points, or 0.68 per cent, to 9,190.99.

Among the weak spots was department store operator Kohl's Corp, which slid 7.2 per cent after reporting lower holiday sales and warning of full-year earnings coming in at the bottom end of an already lowered forecast.

Smaller rival J.C. Penney Co Inc tumbled 11.3 per cent after disappointing same-store sales numbers.

With the Q4 earnings season kicking off next week, analysts expect profits for S&P 500 companies to drop 0.6 per cent in their second consecutive quarterly decline, according to IBES data from Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.49-to-1 ratio favored advancers.

The S&P 500 posted 77 new 52-week highs and no new lows; the Nasdaq Composite recorded 147 new highs and 12 new lows.