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* U.S. reaches "deal in principle" with China on trade
-source
* Energy, financials lead gains among sectors
* Facebook drops on report of potential injunction
* Indexes up: Dow 0.79%, S&P 500 0.86%, Nasdaq 0.73%
(Updates to close of U.S. market)
By Lewis Krauskopf
Dec 12 (Reuters) - Wall Street's main indexes hit record
highs on Thursday following news that the United States had
reached a "deal in principle" with China to resolve a trade war
that has rattled markets for nearly two years.
Stocks were boosted in the morning when President Donald
Trump tweeted that the United States was close to a deal ahead
of Sunday, when a new round of tariffs on Chinese goods has been
set to go into effect. Later in the day, reports emerged that
the two countries had reached a deal in principle. Wall Street has focused on the new round of tariffs, hopeful
they would at least be delayed as the world's two largest
economies make progress on an initial trade deal.
“It's been a long, painful process to come to a deal, if
this is it," said Rick Meckler, partner at Cherry Lane
Investments in New Vernon, New Jersey. "Certainly it's something
that the market has been looking for as maybe the last real
near-term drawback to the market.”
The Dow Jones Industrial Average .DJI rose 220.75 points,
or 0.79%, to 28,132.05, the S&P 500 .SPX gained 26.94 points,
or 0.86%, to 3,168.57, and the Nasdaq Composite .IXIC added
63.27 points, or 0.73%, to 8,717.32.
All three indexes hit intraday records, while the S&P 500
and the Nasdaq posted record high closes.
Investors expressed some wariness of placing too much faith
in the trade developments given the continued ups and downs
during the prolonged U.S.-China trade saga.
The benchmark S&P index has gained 26% so far in 2019,
fueled by interest rate cuts by the U.S. Federal Reserve and
better-than-expected corporate profits along with optimism over
the U.S.-China trade relations.
On Wednesday the Fed held interest rates steady in its last
policy meeting of the year and signaled borrowing costs will not
change anytime soon. On Thursday, Europe's central bank held its
rates steady, and its new head struck a more upbeat tone on the
economy. Among S&P 500 sectors, financials .SPSY and energy .SPNY
gained the most on Thursday, while defensive groups, including
real estate .SPLRCR and utilities .SPLRCU , were negative.
In company news, Facebook Inc FB.O shares fell 2.7% after
the Wall Street Journal reported that the U.S. Federal Trade
Commission is considering seeking a preliminary injunction
against the social media company.
Delta Air Lines Inc DAL.N shares rose 2.9% as the company
projected another annual rise in profit and revenue in 2020.
Advancing issues outnumbered declining ones on the NYSE by a
1.89-to-1 ratio; on Nasdaq, a 1.85-to-1 ratio favored advancers.
The S&P 500 posted 83 new 52-week highs and two new lows;
the Nasdaq Composite recorded 195 new highs and 56 new lows.
About 8 billion shares changed hands on U.S. exchanges, well
above the 6.7 billion daily average over the last 20 sessions.
U.S.-China trade war timeline Image https://tmsnrt.rs/2YJ6IP6
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