US close: Stocks finish at record highs as geopolitical tensions cool
US stocks finished at record highs on Thursday, with the Dow coming close to the psychologically-important 29,000 point level - as Washington appeared to take steps to avoid further conflict in the Middle East, and investors turned their attention back to the US-China trade front.
The Dow Jones Industrial Average closed up 0.74% at 28,956.90, the S&P 500 added 0.67% at 3,274.70, and the Nasdaq Composite was 0.81% firmer at 9,203.43.
At the open, the Dow was 124.58 points higher on Thursday after closing out the previous session in the green, despite news that Iran had fired rockets at two Iraqi bases hosting American troops.
As far as Thursday was concerned, market focus began largely attuned to geopolitical developments after Donald Trump said late on Wednesday that Tehran was seemingly "standing down" following the attack on the Ain al-Asad airbase in retaliation for the death of Iranian General Qasem Soleimani.
Trump vowed to impose "additional punishing economic sanctions" on the Iranian regime but also indicated that Washington would be open to negotiations with the Islamic Republic.
"We must all work together toward making a deal with Iran that makes the world a safer and more peaceful place," Trump said.
“The conflict between the US and Iran appears to have ended as quickly and unexpectedly as it began,” said Oanda analyst Craig Erlam.
“I'm sure many will be left confused by the events of the last week but at the time of writing, it seems clear that neither side currently wants an escalation of the conflict and exited at the first opportunity, while doing their best to save face.”
Erlam said it was a case of turning attention back to other major issues that had dominated markets in recent months, including the trade deal between the US and China, which was set to be signed next week.
“China confirmed that Vice Premier Liu He will be in Washington to sign the agreement and mark the first major de-escalation in the trade war.”
However, senior commander Abdollah Araghi of Iran's Revolutionary Guards later threatened that his nation would soon extract "harsher revenge", according to Reuters.
On the data front, the number of people claiming unemployment claims for the first time fell by more than expected during the last week, returning to the underlying trend that was in place before a Christmas induced jump due to the difficulty of adjusting for seasonal quirks in the data, economists said.
According to the US Department of Labor, initial jobless claims dropped by 9,000 over the week ending on 4 January in comparison to the previous week to reach 214,000.
Analysts had forecast a reading of 220,000.
The afternoon was also peppered with fresh Fedspeak, with St Louis Fed president James Bullard saying that the central bank had a “reasonable chance” of seeing through a soft landing for the country’s economy in 2020, even amid the current geopolitical concerns.
Bullard said his outlook on the current trade tensions was that they would continue, but he reckoned businesses were working with the disruptions relatively effectively.
In corporate news, retail was in focus with discount department store chain Kohl’s down 6.54% after it reported a fall in like-for-like sales over the holiday season, while home furnishings retailer Bed Bath & Beyond plunged 19.22% after it too reported a weaker holiday period on Wednesday night.
Midscale department store behemoth Macy’s was off 2.15% after it announced plans to bring down the shutters on 30 stores, following a fall in sales over the holidays.
Among other stocks, Apple was up 2.12% after the release of positive data on iPhone sales in China, while aerospace giant Boeing rose 1.5% following reports that US officials believed the fatal crash of a Ukraine-operated 737-800 airframe in Tehran earlier in the week was caused by Iranian missiles.
Initial reports from Iran at the time of the crash suggested the accident was due to a technical fault, although these were rapidly met with suspicion and were quickly retracted.
Dow Jones - Risers
Apple Inc. (AAPL) $309.63 2.12%
Goldman Sachs Group Inc. (GS) $242.60 2.04%
Coca-Cola Co. (KO) $55.34 1.82%
American Express Co. (AXP) $127.81 1.81%
Home Depot Inc. (HD) $225.19 1.53%
Boeing Co. (BA) $336.34 1.50%
Microsoft Corp. (MSFT) $162.09 1.25%
McDonald's Corp. (MCD) $208.35 1.18%
Procter & Gamble Co. (PG) $123.85 1.09%
International Business Machines Corporation (CDI) (IBM) $136.74 1.06%
Dow Jones - Fallers
Walgreens Boots Alliance, Inc. (WBA) $54.68 -2.06%
Verizon Communications Inc. (VZ) $58.85 -1.44%
Unitedhealth Group Inc. (UNH) $294.22 -0.57%
Pfizer Inc. (PFE) $38.89 -0.44%
Cisco Systems Inc. (CSCO) $47.32 -0.42%
Walt Disney Co. (DIS) $144.83 -0.39%
Caterpillar Inc. (CAT) $147.31 -0.25%
Chevron Corp. (CVX) $117.51 -0.16%
Nike Inc. (NKE) $101.48 -0.07%
Dowdupont Inc. (DWDP) $30.52 0.00%
S&P 500 - Risers
L Brands Inc (LB) $18.96 4.46%
Jefferies Financial Group Inc. (JEF) $21.90 3.94%
Align Technology Inc. (ALGN) $296.54 3.69%
Ball Corp (BLL) $66.72 3.49%
Abiomed Inc. (ABMD) $183.60 2.75%
Ross Stores Inc. (ROST) $122.13 2.50%
Bristol-Myers Squibb (BMY) $65.45 2.49%
Cabot Oil & Gas Corp. (COG) $17.26 2.43%
Brighthouse Financial, Inc. (BHF) $39.39 2.42%
Advanced Micro Devices Inc. (AMD) $48.97 2.38%
S&P 500 - Fallers
Kohls Corp. (KSS) $46.15 -6.54%
Gap Inc. (GPS) $17.43 -3.54%
Arconic Inc. (ARNC) $29.77 -3.09%
Under Armour Inc. Class A (UAA) $19.79 -3.09%
McCormick & Co. (MKC) $162.24 -3.07%
Ipg Photonics Corp. (IPGP) $139.64 -3.06%
Macerich Co (MAC) $25.24 -2.92%
Humana Inc. (HUM) $364.51 -2.80%
PVH Corp. (PVH) $103.30 -2.76%
Henry Schein Inc. (HSIC) $66.20 -2.55%
Nasdaq 100 - Risers
Biomarin Pharmaceutical Inc. (BMRN) $89.58 5.75%
Align Technology Inc. (ALGN) $296.54 3.69%
Vodafone Group Plc ADS (VOD) $19.88 3.01%
Ross Stores Inc. (ROST) $122.13 2.50%
Xilinx Inc. (XLNX) $101.51 2.35%
Idexx Laboratories Inc. (IDXX) $277.94 2.30%
NetEase Inc. Ads (NTES) $338.37 2.22%
Baidu Inc. (BIDU) $140.86 2.20%
Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $263.50 2.13%
Apple Inc. (AAPL) $309.63 2.12%
Nasdaq 100 - Fallers
Liberty Global plc Series A (LBTYA) $20.80 -2.62%
Henry Schein Inc. (HSIC) $66.20 -2.55%
Liberty Global plc Series C (LBTYK) $19.97 -2.44%
Tesla Inc (TSLA) $481.34 -2.19%
Walgreens Boots Alliance, Inc. (WBA) $54.68 -2.06%
Mylan Inc. (MYL) $20.93 -1.37%
eBay Inc. (EBAY) $35.18 -1.17%
Netflix Inc. (NFLX) $335.66 -1.06%
Hasbro Inc (HAS) $103.90 -1.00%
Activision Blizzard Inc. (ATVI) $59.34 -0.90%