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MARKET SNAPSHOT: Stocks Close At 2019 High On Tentative Deal To Avert Government Shutdown, Trade Optimism

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02/12/2019 | 05:12pm EDT

By Sue Chang and Chris Matthews, MarketWatch

S&P 500 ends above its 200-day moving average for the first time in 46 days

U.S. stock indexes closed at their highest levels for 2019 on Tuesday after lawmakers reached a tentative deal to prevent a government shutdown and as optimism grew over a potential trade deal between the U.S. and China.

Meanwhile, the S&P 500 finished above its 200-day moving average for the first time in 46 days, marking its longest sojourn under the key trendline since March 2016, according to the Dow Jones Market Data Group.

How did major indexes fare?

The Dow Jones Industrial Average climbed 372.65 points, or 1.5%, to 25,425.76, while the S&P 500 index added 34.93 points, or 1.3%, to 2,744.73. The Nasdaq Composite Index advanced 106.71 points, or 1.5%, to 7,414.62.

What drove the market?

Democratic and Republican lawmakers reached a deal late Monday to avert another government closure after GOP negotiators agreed to a border-security deal that will involve far less money for an extension of the southern U.S. border wall than President Donald Trump has been demanding.

The tentative agreement, which involves 55 miles of new border fencing, still requires approval from Trump, who reportedly is not "thrilled" but stopped short of saying he will reject it.

Bilateral trade negotiations entered a second day in Beijing, with Treasury Secretary Steven Mnuchin and U.S. Trade Representative Robert Lighthizer due to arrive Thursday for more high-level discussions. A 12:01 a.m. Eastern time March 2 deadline is looming for an agreement to be struck between the two countries.

Meanwhile, investors digested a new batch of earnings releases as fourth-quarter earnings season entered its final stretch.

The National Federation of Independent Businesses small business index fell 3.2 points to 101.2 (https://www.nfib.com/surveys/small-business-economic-trends/), the lowest level since the weeks leading up to the 2016 presidential election, though above its historical average of 86.

The number of job openings in the U.S. reached an all-time high of 7.3 million in December while the share of Americans quitting there jobs held steady at 2.3%, according to the Labor Department.

Federal Reserve Chairman Jerome Powell, speaking at a conference at Mississippi Valley State University, did not discuss the monetary policy but said the economy is strong at the national level and highlighted the fact that unemployment is near multidecade lows.

What were analysts saying?

"The relief from avoiding another government shutdown, and speculation that something will happen with China, is helping push markets higher, though I'm surprised at this reaction, given that Trump has not yet said he'd sign the deal," Larry Benedict, chief executive of the Opportunistic Trader told MarketWatch.

"The S&P 500 is pushing up against the 2,735 resistance level that we've hit several times. There may be more on the upside, but we could also be seeing some topping action at these levels," he said.

What stocks were in focus?

Coty jumped 13% after JAB holdings announced its plans to commence a tender offer to acquire 150 million shares of the company at a price of $11.65 a share, versus Monday's closing price of $9.66 per share.

Shares of Molson Coors Brewing slid 9.4% after the beer maker reported higher-than-expected, fourth-quarter earnings but missed Wall Street's revenue forecasts.

Ellie Mae soared 21% after the company agreed to be acquired by private-equity firm Thoma Bravo in a deal worth $3.7 billion.

Under Armour shares gained 4.5% after the company beat earnings and revenue estimates for the fourth quarter.

Shares of Gilead Sciences fell 3.3% after the pharmaceutical company announced Monday evening that a late-stage, placebo-controlled study designed to evaluate a type of chronic liver disease drug, Selonsertib, didn't meet its desired outcome .

US Foods Holding Corp dropped 1.8% after the company reported fourth-quarter earnings that fell short of Wall Street forecasts.

Shares of Electronic Arts rose 5.2% after the videogame publisher announced that its new game , "Apex Legends," had attracted 25 million new players in its first week of availability.

How were other markets trading?

In Asia , the Nikkei 225 index jumped 2.6% and the Shanghai Composite rose 0.6%. The Stoxx Europe 600 also gained while the U.K.'s FTSE 100 edged lower .

Crude oil rose, while gold settled slightly higher and the U.S. dollar fell against its peers .

--Barbara Kollmeyer contributed to this article

Stocks mentioned in the article
ChangeLast1st jan.
CHINA-SHANGHAI COMP 0.11% 2883.44 End-of-day quote.15.44%
COTY 0.79% 8.92 Delayed Quote.34.91%
DJ INDUSTRIAL 0.19% 26252.24 Delayed Quote.12.54%
ELECTRONIC ARTS 0.62% 94.62 Delayed Quote.19.91%
ELLIE MAE INC 0.00%End-of-day quote.57.55%
FTSE 100 INDEX 0.28% 7234.11 End-of-day quote.0.00%
GILEAD SCIENCES 0.14% 64.22 Delayed Quote.2.67%
MOLSON COORS BREWING -0.17% 51.69 Delayed Quote.-7.96%
NASDAQ 100 -0.33% 7707.427106 Delayed Quote.21.08%
NASDAQ COMP. -0.36% 7991.388419 Delayed Quote.19.79%
NIKKEI 225 0.05% 20628.01 Real-time Quote.3.31%
S&P 500 -0.05% 2922.95 Delayed Quote.16.66%
UNDER ARMOUR 1.23% 18.98 Delayed Quote.7.41%
US FOODS HOLDING CORP 2.10% 40.32 Delayed Quote.27.43%
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