Tech rally, trade hopes boost Wall Street to record highs

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By Sruthi Shankar

(Reuters) – U.S. stocks hit record highs on Thursday as Middle East tensions eased, optimism about a U.S.-China trade deal rose and several brokerages boosted price targets on high-profile companies.

The biggest boosts to the main indexes were Facebook Inc (O:), Apple Inc (O:), Amazon.com Inc (O:), Alphabet Inc (O:) and Microsoft Corp (O:) which rose between 0.7% and 1.5%.

Apple gained on twin support from data showing iPhone sales jumped more than 18% in China in December as well as a price target hike by Jefferies on exceptions of a strong finish to 2019.

Cowen Equity Research raised its price target on Alphabet, Facebook, and Twitter (N:) after its survey of U.S. ad buyers showed upbeat spending in 2020. Technology stocks () rose 0.9%, the most among the major S&P sectors.

After a wobbly start to the new year on fears of an all-out conflict in the Middle East, nerves eased on Wednesday as Washington and Tehran looked to defuse the crisis after Iran’s retaliatory attack following the killing of a top general.

Further aiding the sentiment, China’s commerce ministry said on Thursday that Vice Premier Liu He will sign a Phase 1 trade deal in Washington next week, raising hopes that a prolonged tariff war between the two sides will come to a close.

“While geopolitical risks can trigger bouts of short-term volatility, investors should not ignore the recent improvements in selected economic indicators and earnings,” strategists at Eastspring Investments said in a client note.

“Should the nascent recovery in the global economy continue, further upside in global markets is still possible.”

At 10:03 a.m. ET, the Dow Jones Industrial Average () was up 115.20 points, or 0.40%, at 28,860.29, the S&P 500 () was up 14.58 points, or 0.45%, at 3,267.63 and the Nasdaq Composite () was up 69.25 points, or 0.76%, at 9,198.49.

After a better-than-expected private payrolls report on Wednesday, investors are awaiting Friday’s jobs report as well as fourth-quarter reports. Big U.S. banks will kick off the quarterly earnings season next week.

Earnings for the S&P 500 companies are expected to drop 0.6% in their second consecutive decline, according to Refinitiv IBES data.

Shares in Kohl’s Corp (N:) slid 8% after the department store operator forecast full-year earnings at the bottom end of an already lowered target. J C Penney Co Inc (N:) dropped 5.8% after disappointing same-store sales numbers.

Advancing issues outnumbered decliners by a 1.43-to-1 ratio on the NYSE and a 1.81-to-1 ratio on the Nasdaq.

The S&P index recorded 55 new 52-week highs and no new lows, while the Nasdaq recorded 112 new highs and seven new lows.

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