After initially showing a lack of direction, stocks have moved mostly higher over the course of the trading session on Tuesday. With the upward move on the day, the Dow has reached a new record intraday high.
Currently, the major averages are all in positive territory. The Dow is up 122.98 points or 0.5 percent at 26,774.19, the Nasdaq is up 12.38 points or 0.2 percent at 8,049.68 and the S&P 500 is up 5.18 points or 0.2 percent at 2,929.77.
Stocks are adding to the gains posted in the previous session, which came after U.S. and Canadian officials agreed on a trade deal to replace the North American Free Trade Agreement shortly before a midnight deadline.
The new trade deal, called the United States-Mexico-Canada Agreement, or USMCA, will reportedly provide more market access to U.S. dairy farmers and effectively cap Canadian automobile exports to the U.S.
A joint statement by U.S. Trade Representative Robert Lighthizer and Canadian Foreign Affairs Minister Chrystia Freeland said the agreement will “strengthen the middle class, and create good, well-paying jobs and new opportunities for the nearly half billion people who call North America home.”
President Donald Trump, a harsh critic of NAFTA, also praised the USMCA as a “historic transaction” in a post on Twitter on Monday.
“It is a great deal for all three countries, solves the many deficiencies and mistakes in NAFTA, greatly opens markets to our Farmers and Manufacturers, reduces Trade Barriers to the U.S. and will bring all three Great Nations together in competition with the rest of the world,” Trump tweeted.
The leaders of the U.S., Canada, and Mexico are expected to sign the new agreement before the end of November, although it will still need to be approved by Congress.
Buying interest has remained somewhat subdued, however, as Trump also said it is “too early to talk” with China about the escalating trade dispute between the two countries.
“Can’t talk now because they’re not ready,” Trump said of China. “Because they have been ripping us for so many years, it doesn’t happen that quickly.”
He added, “If politically, people force it too quickly, you’re not going to make the right deal for our workers and for our country.”
Reports of the last-minute cancellation of U.S. Defense Secretary Jim Mattis’ trip to China have added to the concerns about rising tensions.
After trending lower in recent sessions, tobacco stocks have shown a substantial move back to the upside on the day. The NYSE Arca Tobacco Index has surged up by 4.2 percent after closing lower for seven consecutive sessions.
The rebound by tobacco stocks comes after a report from CNBC said the FDA seized “thousands of pages of documents” in a surprise inspection of e-cigarette maker Juul’s San Francisco headquarters last week
Significant strength also remains visible among gold stocks, as reflected by the 3.2 percent jump by the NYSE Arca Gold Bugs Index.
The strength in the gold sector comes amid a sharp increase by the price of the precious metal, with gold for December delivery spiking $17.90 to $1,209.60 an ounce.
Utilities and semiconductor stocks have also moved notably higher on the day, while biotechnology and transportation stocks have moved to the downside.
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower on Tuesday, although Japan’s Nikkei 225 Index bucked the downtrend and inched up by 0.1 percent. Hong Kong’s Hang Seng Index plunged by 2.4 percent, while Australia’s S&P/ASX 200 Index slid by 0.8 percent.
The major European markets have also moved to the downside on the day. While the French CAC 40 Index advanced by 0.7 percent, the German DAX Index and the U.K.’s FTSE 100 Index rose by 0.4 percent and 0.3 percent, respectively.
In the bond market, treasuries are rebounding following the downward move seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is down by 2.4 basis points at 3.056 percent.
by RTTNews Staff Writer
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