Stocks moved higher on Wall Street in early trading Thursday as U.S. markets reopened following the New Year’s Day holiday.
The gains followed a rally in overseas markets after China’s central bank said it will free up more money for lending. In the U.S., the government said applications for unemployment aid declined last week, matching analysts’ forecasts.
Investors have been encouraged in recent weeks as the U.S. and China have taken steps to resolve some of their differences in their long-running trade dispute. Washington and Beijing announced last month that they reached an agreement over a “Phase 1” trade deal that calls for the U.S. to reduce tariffs and China to buy larger quantities of U.S. farm products.
Earlier this week, President Donald Trump tweeted that he will sign the initial trade deal with China at the White House next month. He also said he plans to travel to Beijing at a later date to open talks on other sticking points in the dispute that remain to be worked out, including Chinese practices the U.S. complains unfairly favor its own companies.
Technology companies accounted for a big slice of the market’s upward move Thursday. Western Digital climbed 3.7% and Advanced Micro Devices rose 3%.
Communication services and industrial stocks also notched solid gains. Google parent Alphabet was up 1.5% and General Electric rose 1.8%.
Health care stocks were the biggest decliners. Perrigo dropped 1.3%.
KEEPING SCORE: The S&P 500 was up 0.5% as of 10:12 a.m. Eastern time. The Dow Jones Industrial Average rose 175 points, or 0.6%, to 28,714. The Nasdaq composite gained 0.8%.
BOND YIELDS: Bond prices rose. The yield on the 10-year Treasury fell to 1.86% from 1.91% late Tuesday.
ENERGY: Benchmark U.S. crude oil rose 7 cents to $61.13 a barrel. Brent crude, the international standard, was up 24 cents to $66.24 per barrel.
CHINA BANKING: China’s central bank said it will cut the amount of money banks will be required to have on hand from Jan. 6. The move is expected to boost the country’s slowing economy ahead of the Lunar New Year, which falls on Jan. 25. Companies and individuals typically need large amounts of cash on hand during China’s most important annual holiday to pay bonuses, clear debts and cover other expenses.
MARKETS OVERSEAS: Major indexes in Europe rose. Germany’s DAX was 1.1% higher, while France’s CAC 40 rose 1.2%. Britain’s FTSE 100 added 1%. In Asia, Hong Kong’s Hang Seng jumped 1.1% and South Korea’s Kospi lost 1.0%. Tokyo’s market was closed for the New Year’s Day holiday.