* U.S. retail sales increase 0.3% in December
* Chipmakers rise after TSMC’s strong outlook
* Morgan Stanley jumps on new objectives, earnings
* Futures up: Dow 0.30%, S&P 0.33%, Nasdaq 0.39% (Adds comment, updates prices)
By Sruthi Shankar
Jan 16 (Reuters) - U.S. stocks were poised to open at record highs on Thursday, after the United States and China signed an initial trade agreement and Morgan Stanley wrapped up big bank earnings on a strong note.
The benchmark S&P 500 was set to open above 3,300 mark for the first time ever. The blue-chip Dow Jones Industrial Average and the Nasdaq were also on track to open at new all-time highs.
Wall Street bank Morgan Stanley rose 6.5% in premarket trading after beating quarterly profit estimates and raising its performance goals.
Investors took heart from the signing of the trade deal on Wednesday that paused an 18-month long tariff war that had bruised financial markets and crimped global growth.
China is expected to boost purchases of U.S. goods and services in exchange for the rolling back of some tariffs as part of the deal, but concerns remain with several thorny issues still unresolved.
“The Phase 1 trade deal has been largely priced into markets,” said Peter Kenny, founder of Strategic Board Solutions LLC.
“Any movement forward from here, at least in the near-term, is going to be driven by earnings. So far, we do see a sort of a positive tone set by the financials.”
Analysts expect earnings at S&P 500 companies to have dropped 0.5% in the fourth quarter, according to Refinitiv IBES data, the second consecutive decline.
At 8:52 a.m. ET, Dow e-minis were up 86 points, or 0.3%. S&P 500 e-minis were up 10.75 points, or 0.33% and Nasdaq 100 e-minis were up 35.75 points, or 0.39%.
Shares of semiconductor stocks, including Micron Technology Inc and Advanced Micro Devices Inc, were up about a percent after a promising outlook from the world’s top contract chipmaker TSMC pointed to a recovery in the chip sector.
Data from the Commerce Department showed U.S. retail sales rose 0.3% in December, in-line with expectations.
The numbers follow disappointing holiday sales reports from retailers including Target Corp and J.C. Penney Co Inc spooked investors.
Signet Jewelers Ltd jumped 33.8% after raising 2020 adjusted earnings estimate on the back of upbeat holiday sales.
Tesla Inc fell 4.4% after Morgan Stanley downgraded the stock to “underweight” from “equal weight”. (Reporting by Sruthi Shankar in Bengaluru; Editing by Sriraj Kalluvila)