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US: Wall St steady as US, China announce trade deal

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The S&P 500 and the Dow industrials ended little changed on Friday, hitting record highs in the session, as the United States and China announced an initial trade agreement, cooling tensions that have rattled markets.

[NEW YORK] The S&P 500 and the Dow industrials ended little changed on Friday, hitting record highs in the session, as the United States and China announced an initial trade agreement, cooling tensions that have rattled markets.

The S&P 500 technology sector and the tech-heavy Nasdaq finished solidly in positive territory, with gains in Apple Inc providing a boost.

Trading was choppy following announcement of the agreement, which reduces some US tariffs in exchange for increased Chinese purchases of American farm goods. The United States has agreed to suspend tariffs on US$160 billion in Chinese goods that were due to take effect on Dec 15, a deadline that had been closely watched by investors.

"The risk of trade (dispute) escalation has been averted for now, and that's a positive," said Sunitha Thomas, regional portfolio advisor at Northern Trust Wealth Management in Chicago.

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Investors were also digesting Prime Minister Boris Johnson's commanding victory in the British election, which could bring more clarity to the country's planned exit from the European Union.

"We got confirmation today that two major risks that have been weighing on the market all year have been lifted, for now at least," Ms Thomas said.

"The market is not up more because we have had some of the rally coming into it, and I think there is now a recognition that there needs to be policy follow-through on the negotiation of Brexit and also what really the details of this deal between China and the US are," she added.

The Dow Jones Industrial Average rose 3.33 points or 0.01 per cent to 28,135.38, the S&P 500 gained 0.23 point or 0.01 per cent to 3,168.8 and the Nasdaq Composite added 17.56 points or 0.2 per cent to 8,734.88.

Utilities led gains among the S&P 500 sectors along with tech, while energy and materials lagged.

The S&P 500 rose 0.7 per cent for the week, its ninth rise out the past 10 weeks.

Improving sentiment about trade tensions, interest rate cuts from the US Federal Reserve and encouraging economic data have fuelled records for the major US stock indexes. The benchmark S&P 500 has gained 26 per cent so far in 2019.

Earlier this week, the Fed signalled borrowing costs will not change anytime soon.

In company news, Adobe Inc shares rose 3.9 per cent after it beat Wall Street estimates for fourth-quarter revenue and profit.

Broadcom Inc shares dropped 3.8 per cent after the company provided a lukewarm revenue forecast for 2020.

Oracle Corp shares fell 3.5 per cent after its revenue fell short of quarterly estimates.

Advancing issues outnumbered declining ones on the NYSE by a 1.19-to-1 ratio; on Nasdaq, a 1.07-to-1 ratio favoured decliners.

The S&P 500 posted 76 new 52-week highs and one new low; the Nasdaq Composite recorded 128 new highs and 49 new lows.

About 7.4 billion shares changed hands in US exchanges, above the 6.8 billion-share daily average over the last 20 sessions.

REUTERS