December 31, 2018 / 1:56 PM / 5 months ago

US STOCKS- U.S.-China trade progress boosts futures at end of turbulent year

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* Futures up: Dow 0.82 pct, S&P 0.68 pct, Nasdaq 0.88 pct

* Trump says “big progress” on possible China trade deal

* Shares of trade-sensitive Caterpillar and Boeing rise

* Energy stocks get boost as oil prices rise over 2 pct

* Dow, S&P, Nasdaq set for biggest one-year drop since 2008 (Adds comments, updates prices)

By Shreyashi Sanyal

Dec 31 (Reuters) - U.S. stock index futures jumped on Monday, boosted by signs of progress in the U.S.-China trade dispute and rising crude oil prices, setting up Wall Street to end its worst year in a decade on an upbeat note.

U.S. President Donald Trump said he had a “very good call” with China’s President Xi Jinping on Saturday to discuss trade and claimed “big progress” was being made.

“The progress cited by Trump on trade talks and a continuation of last week’s rally are lifting investor spirits,” Peter Cardillo, chief market economist at Spartan Capital Securities, said in a client note.

The update on the trade front also helped boost crude oil prices more than 2 percent, bolstering the market and energy stocks, the worst performing among the 11 major S&P sectors this year.

Shares of energy companies, including Exxon Mobil Corp and Chevron Corp, rose in premarket trading. Boeing Co and Caterpillar Inc, which along with other industrials are sensitive to trade-related news, gained more than 1.5 percent each.

At 8:32 a.m. ET, Dow e-minis were up 189 points, or 0.82 percent. S&P 500 e-minis were up 17 points, or 0.68 percent and Nasdaq 100 e-minis were up 55.5 points, or 0.88 percent.

After the violent swings this month, the last day of trading is expected to be relatively muted in comparatively light volumes ahead of the holiday on Tuesday for New Year’s Day.

Last week started with the benchmark S&P 500 and Dow Jones Industrial Average coming within a whisker of a 20 percent decline from their closing high — also known as bear market territory — before rallying after Christmas to end the week higher after three straight weeks of losses.

Still, the S&P 500 down 9.94 percent so far in December, was its biggest monthly drop since February 2009 and its worst December since the Great Depression.

The benchmark index has fallen 7.03 percent this year, while the Dow has fallen 6.70 percent, both snapping two-year winning streaks to post their biggest yearly drop since 2008, during the throes of the financial crisis. The Nasdaq has snapped a six-year winning streak to drop 4.62 percent this year.

Most of the damage was inflicted in the past three months as worries about Sino-U.S. trade frictions, U.S. interest rate hikes, slowing corporate profit growth, Brexit and the partial U.S. federal government shutdown, entering its 10th day, formed a perfect storm across global financial markets.

Many of these concerns will carry over into 2019, but for this week, the major point of interest will be key U.S. economic reports, including on manufacturing and employment. (Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak Dasgupta)

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