• More than 28,000 people in China have been infected by the coronavirus
  • China will cut by half tariffs on hundreds of U.S. goods valued at $75 billion
  • U.S. nonfarm productivity increased at a 1.4% in the fourth quarter of 2019

U.S. stocks rose on Thursday to new record highs after China said it will cut tariffs on $75 billion of U.S. goods and the U.S. released some strong economic data.

The Dow Jones Industrial Average rose 87.93 points to 29,378.78 while the S&P 500 gained 11.15 points to 3,345.84 and the Nasdaq Composite Index advanced 65.23 points to 9,573.92. All three benchmarks set new closing highs.

Volume on the New York Stock Exchange totaled 3.14 billion shares with 1,423 issues advancing, 259 setting new highs, and 1,504 declining, with 32 setting new lows.

Active movers were led by Petroleo Brasileiro (PBR), Nokia Corp. (NOK) and Twitter Inc. (TWTR)

China’s Ministry of Finance said on Thursday that it will cut by half tariffs on hundreds of U.S. goods valued at about $75 billion, effective Feb. 14. Tariffs on some U.S. goods will be halved from 10% to 5%, and others from 5% to 2.5%.

Meanwhile, China’s National Health Commission the number of coronavirus infections in the country have surpassed 28,018 and at least 563 people have died.

“The sling shot from last Friday’s lows has happened quickly, showing us that dip buying remains strong,” said Frank Cappelleri, executive director at Instinet.

However, JPMorgan strategist Nikolaos Panigirtzoglou is cautious about the recent rally.

“Despite this week’s equity market rebound we are reluctant to chase short-term momentum,” Panigirtzoglou said. “Instead we tactically trim the risk of our portfolio further and recommend a more modest equity overweight.”

Panigirtzoglou added that “although we recognize that the peak in the rate of increase in the number of new coronavirus cases appears to be behind us as containment measures thus far appear to have been effective, this could change as factories reopen in China and more people come in contact with each other. In other words, there is a significant risk of an unexpected re-acceleration of new coronavirus cases.”

The U.S. Labor Department said on Thursday nonfarm productivity increased at a 1.4% annualized rate in the fourth quarter of 2019. Productivity decreased at an unrevised 0.2% pace in the July-September period. Growth in unit labor costs slowed to a 1.4% rate.

Initial jobless claims fell by 15,000 to 202,000 in the seven days ended Feb. 1, the government said on Thursday.

Dallas Fed President Robert Kaplan said he expected U.S. gross domestic product to grow by 2.25% this year.

"My outlook for growth would be even firmer if not for [the] Boeing and coronavirus situations," he said. "Having a little more trade stability will help global growth this year, less uncertainty should help stabilize business fixed investment."

Twitter (TWTR) shares jumped more than 15% on good quarterly results and user numbers

Overnight in Asia, markets finished higher. China’s Shanghai Composite gained 1.72%, while Hong Kong’s Hang Seng rose 2.64%, and Japan’s Nikkei-225 advanced 2.38%.

In Europe markets closed higher, as Britain’s FTSE-100 rose 0.3%, France’s CAC-40 climbed 0.88% and Germany’s DAX gained 0.72%.

Crude oil futures gained 0.59% at $51.05 per barrel and Brent crude rose 0.31% at $55.10. Gold futures climbed 0.44%.

The euro dipped 0.17% at $1.098 while the pound sterling fell 0.59% at $1.2925.

The yield on the 10-year Treasury edged down 0.3% to 1.644% while yield on the 30-year Treasury fell 0.89% to 2.114%.