US close: Stocks jump on trade hopes ahead of long weekend

US stocks went into the long holiday weekend higher, amid hopes of improving relations between the US and China, even as the latest batch of economic data showed that US consumer sentiment was quickly souring.

The Dow Jones Industrial Average added 1.38% or 336.25 points to 24,706.35, while the S&P 500 rose 1.32% or 34.75 points to reach 2,670.71 and the Nasdaq Composite gained 1.03% or 72.76 points to 7,157.23.

In parallel, the yield on the benchmark 10-year US Treasury note was higher by three basis points to 2.78%.

From a sector standpoint, the best performing industrial groups: Clothing & Accessories (5.77%), Oil equipment & services (5,14%) and Trucking (4.22%).

Sentiment was boosted by a report overnight that the US might consider easing some trade tariffs against China, followed in quick succession by details of the offer that Beijing put on the table at the start of the month.

According to the Wall Street Journal, although it was later denied by a government spokesman, US Treasury Secretary Steven Mnuchin had discussed lifting some or all tariffs imposed on Chinese imports and suggested offering a tariff roll-back during trade discussions scheduled for 30 January.

Come Friday afternoon, Bloomberg reported that China had offered to embark on a six-year $1.0trn buying spree of US goods in a bid to reconfigure the trade relationship between the two economic giants and reduce its trade surplus with America to zero by 2024.

Oanda analyst Craig Erlam said that at the moment, markets appear to be standing up to the challenge which would suggest the rally in stocks has more to run and this may not just be a corrective move in a bearish market.

"Earnings season will likely have a big say in whether the rally is sustained, as will the Trump administration which always has an eye on the stock market."

In corporate news, Tesla shares skidded 12.97% after founder Elon Musk said the company would cut its workforce by 7% and that fourth quarter profits would be down on the prior three-month stretch.

Musk also said the company had to make its cars, batteries and solar products competitive with fossil fuels.

Elsewhere, Eli Lilly was 2.16% weaker in pre-market trade after the pharmaceutical group reported disappointing results for a phase 3 trial of its Lartruvo treatment.

Tiffany shares on the other hand were higher by 5.35% even after the jeweller reported a drop in holiday sales and issued a downbeat outlook for the full year.

Netflix was also in focus. Late on Thursday, the streaming video giant said it added more new subscribers during the holiday season than analysts had expected and beat the Street's forecasts for its bottom line, but its sales fell short of forecasts.

Its shares ended the day down by 3.99%.

Shares of of American Express reversed early losses after the financial giant posted fourth quarter revenues of $10.5bn, which was a shade below the consensus estimate for $10.6bn, ending the session 1.0% higher.

Consumer confidence in the dumps

On the data front, the data was decidedly mixed.

According to a preliminary reading, the University of Michigan's US consumer confidence index slid from a reading of 98.3 for December to 90.7 in January (consensus: 96.4).

Americans judged the outlook for the domestic economy to be the worst since mid-2014, citing various sources of uncertainty, including: the partial government shutdown, the impact of tariffs, instabilities in financial markets, the global slowdown, and the lack of clarity about monetary policies.

In parallel, the Federal Reserve reported a slightly better-than-expected increase in US industrial production for the month of December of 0.3% month-on-month (consensus: 0.2%), albeit amid sharp increases in manufacturing and mining output of 1.1% and 1.5%, respectively.

Dow Jones - Risers

Home Depot Inc. (HD) $179.49 2.69%
Unitedhealth Group Inc. (UNH) $265.50 2.21%
3M Co. (MMM) $195.86 2.16%
Chevron Corp. (CVX) $114.37 2.15%
Cisco Systems Inc. (CSCO) $45.03 1.85%
Dowdupont Inc. (DWDP) $58.06 1.79%
Goldman Sachs Group Inc. (GS) $202.54 1.73%
Nike Inc. (NKE) $80.45 1.67%
JP Morgan Chase & Co. (JPM) $104.59 1.62%
Boeing Co. (BA) $364.73 1.57%

Dow Jones - Fallers

Walt Disney Co. (DIS) $111.04 0.03%
Pfizer Inc. (PFE) $42.53 0.14%
Merck & Co. Inc. (MRK) $75.87 0.36%
Verizon Communications Inc. (VZ) $57.09 0.46%
Walgreens Boots Alliance, Inc. (WBA) $72.43 0.61%
Apple Inc. (AAPL) $156.82 0.62%
McDonald's Corp. (MCD) $182.57 0.81%
Procter & Gamble Co. (PG) $91.39 0.86%
Travelers Company Inc. (TRV) $123.97 0.87%
Visa Inc. (V) $138.58 0.89%

S&P 500 - Risers

PG&E Corp. (PCG) $7.23 13.68%
VF Corp. (VFC) $82.34 12.39%
Schlumberger Ltd. (SLB) $44.73 8.12%
Western Digital Corp. (WDC) $39.20 7.49%
J.B. Hunt Transport Services Inc. (JBHT) $106.11 6.19%
Kansas City Southern (KSU) $110.52 6.13%
Edwards Lifesciences Corp. (EW) $168.41 5.85%
Micron Technology Inc. (MU) $35.76 5.55%
Tiffany & Co. (TIF) $89.82 5.35%
Amerisource Bergen Corp. (ABC) $79.86 4.97%

S&P 500 - Fallers

Carmax Inc. (KMX) $61.94 -4.09%
Netflix Inc. (NFLX) $339.10 -3.99%
Eli Lilly and Company (LLY) $116.59 -2.16%
Pitney Bowes Inc. (PBI) $7.15 -1.92%
Equinix, Inc. (EQIX) $374.67 -1.88%
Mattel Inc. (MAT) $12.44 -1.82%
PPG Industries Inc. (PPG) $105.43 -1.80%
NRG Energy Inc. (NRG) $40.33 -1.75%
Tenet Healthcare Corp. (THC) $22.03 -1.61%
Endo International Plc (ENDP) $9.70 -1.52%

Nasdaq 100 - Risers

Western Digital Corp. (WDC) $39.20 7.49%
J.B. Hunt Transport Services Inc. (JBHT) $106.11 6.19%
Micron Technology Inc. (MU) $35.76 5.55%
JD.com, Inc. (JD) $23.26 5.06%
Fiserv Inc. (FISV) $77.82 4.46%
Lam Research Corp. (LRCX) $147.55 4.08%
Seagate Technology Plc (STX) $40.23 3.87%
Autodesk Inc. (ADSK) $141.73 3.83%
Electronic Arts Inc. (EA) $92.52 3.59%
Fastenal Co. (FAST) $59.35 3.51%

Nasdaq 100 - Fallers

Tesla Inc (TSLA) $302.26 -12.97%
Netflix Inc. (NFLX) $339.10 -3.99%
Charter Communications Inc. (CHTR) $291.40 -1.02%
Celgene Corp. (CELG) $86.27 -0.37%
Incyte Corp. (INCY) $78.42 -0.32%
Biogen Inc (BIIB) $337.42 -0.27%
Sirius XM Holdings Inc (SIRI) $6.05 0.00%
Express Scripts Holding Co (ESRX) $92.33 0.00%
Shire Plc Ads (SHPG) $179.20 0.00%
Dollar Tree Inc (DLTR) $94.66 0.10%