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US stocks post solid weekly gains amid trade talks

Xinhua | Updated: 2018-09-02 10:57
Traders work on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange on August 9, 2018 in New York. [Photo/VCG]

NEW YORK - US stocks posted solid weekly gains as investors closely monitored trade talks between the United States and its neighbors while digesting a batch of key economic data.

For the week, the Dow rose 0.7 percent, the S&P climbed advanced 0.9 percent, and the Nasdaq gained 2.1 percent.

Trade concerns have kept a lid on stock gains in recent months as investors assessed the potential impact of protectionist trade policies on the global economy.

US President Donald Trump announced Monday that the United States and Mexico had reached a preliminary bilateral trade pact that would replace the North American Free Trade Agreement (NAFTA) and that Canada should join the deal or face tariffs against Canada's automobile manufacturing industry.

The United States and Canada failed to meet the Friday deadline imposed by the Trump administration to revamp the NAFTA trade agreement as major differences remain in bilateral talks.

It is unclear whether the United States and Canada will work out their differences in the next few weeks.

On the economic front, consumer sentiment in the United States rose slightly in August, opposite to economists' expectation, according to University of Michigan's monthly survey. The consumer sentiment index hit 96.2 in the final reading of the month.

Although there was a small uptick in late August, consumer sentiment remained at its lowest level since January. These results stand in sharp contrast to the recent very favorable report on growth in the national economy, according to a statement the university released on Friday.

The number of Americans filing for unemployment benefits rose last week, but the underlying trend continued to point to a tightening labor market that should keep the economy on a strong growth path this year.

In the week ending Aug. 25, the advance figure for seasonally adjusted initial claims was 213,000, an increase of 3,000 from the previous week's unrevised level of 210,000, said the Labor Department on Thursday.

The four-week moving average was 212,250, a decrease of 1,500 from the previous week's unrevised average of 213,750. This is the lowest level for this average since Dec. 13, 1969 when it was 210,750, said the department.

The Commerce Department said on Wednesday that Economic growth was stronger during the second quarter than earlier estimated.

Real gross domestic product (GDP), the value of all goods and services produced across the economy, rose at a 4.2 percent annual rate in the second quarter, adjusted for seasonality and inflation.

The figure was higher than the 4.1 percent annual rate the department estimated earlier.

Meanwhile, pending home sales fall for seventh straight month in July.

Signed contracts to buy existing homes fell 0.7 percent in July compared with June, according to the National Association of Realtors' pending home sales index. The index was down 2.3 percent compared with July 2017.

The S&P CoreLogic Case-Shiller US National Home Price NSA Index, covering all nine US Census divisions, reported a 6.2 percent annual gain in June, down from 6.4 percent in the previous month.

"Even as home prices keep climbing, we are seeing signs that growth is easing in the housing market," said David Blitzer, managing director and chairman of the index committee at S&P Dow Jones Indices in a release.

"Sales of both new and existing homes are roughly flat over the last six months amidst news stories of an increase in the number of homes for sale in some markets," said Blitzer.

Meanwhile, consumer confidence rose in August to its highest level since October 2000, building on July's solid result.

The Conference Board Consumer Confidence Index increased to 133.4 in August, up from 127.9 in July.

"Expectations, which had declined in June and July, bounced back in August and continue to suggest solid economic growth for the remainder of 2018," said Lynn Franco, Director of Economic Indicators at The Conference Board.

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