S&P 500 rises above record closing high on U.S.-China trade progress

(Reuters) – The S&P 500 on Friday rose above its record closing high after Washington said it was close to finalizing parts of a trade pact with Beijing.

Traders work on the floor of the New York Stock Exchange (NYSE) in New York City, NY, U.S. May 18, 2017. REUTERS/Brendan McDermid

The benchmark index .SPX closed at 3,025.86 points after touching a record high of 3,027.98 on July 26. On Friday, the index touched a high of 3,027.39.

The U.S. Trade Representative’s office said on Friday that deputy-level talks would carry on, but provided no details on the areas of progress. President Donald Trump said the United States was doing “very well” in the negotiations.

“The market had been a little back and forth the last several sessions, waiting for something substantial to happen and progress in trade talks with the goal of finalizing a deal would be certainly substantial,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.

The developments rounded off a strong week for equity markets, which were boosted by a clutch of better-than-expected third-quarter earnings reports. The S&P 500 was set for its best week in seven, while the Nasdaq eyed its biggest percentage gain in eight weeks.

Intel Corp (INTC.O) jumped 7.2% and was on course for its best day since January 2018 after issuing an upbeat forecast, helping lift the Philadelphia Semiconductor index .SOX to a record high.

But shares of Amazon.com Inc (AMZN.O) dropped 1.5% after the e-commerce giant forecast revenue and profit for the crucial holiday quarter below estimates, citing fierce competition.

Investors are now counting on the Federal Reserve to lower borrowing costs for the third time this year at its policy meeting next week after a clutch of poor economic data earlier in October.

At 12:59 p.m. ET, the Dow Jones Industrial Average .DJI was up 173.72 points, or 0.65%, at 26,979.25, and the S&P 500 was up 13.06 points, or 0.43%, at 3,023.35. The Nasdaq Composite .IXIC was up 50.82 points, or 0.62%, at 8,236.61.

Boeing Co (BA.N) dropped 1.2% after Indonesian authorities looking into the Lion Air crash said the world’s largest planemaker failed to grasp risks in the design of cockpit software on its 737 MAX jet.

Apparel maker VF Corp (VFC.N) fell 6.8% after reporting lower-than-expected second-quarter revenue, hurt by sluggish demand for its North Face and Vans brands.

Shares of Charter Communications Inc (CHTR.O) gained 7.3% after the cable operator posted better-than-expected quarterly results as it attracted more customers for its broadband services, offsetting a drop in pay TV subscribers.

The next round of earnings due next week includes Apple Inc (AAPL.O), Alphabet Inc (GOOGL.O), Pfizer Inc (PFE.N) and Merck & Co Inc (MRK.N).

Advancing issues outnumbered decliners by a 1.59-to-1 ratio on the NYSE and by a 1.97-to-1 ratio on the Nasdaq.

The S&P index recorded 39 new 52-week highs and three new lows, while the Nasdaq recorded 77 new highs and 50 new lows.

Reporting by Arjun Panchadar and Ambhini Aishwarya in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva

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