Thursday's Stock Market Close: US Equities Surge On Robust Economic Data, Morgan Stanley Earnings

U.S. stocks closed higher Thursday buoyed by some strong economic data and a surge in profits from banking giant Morgan Stanley.

The Dow Jones Industrial Average jumped 267. 35 points to 29,297.57 while the S&P 500 climbed 27.61 points to 3,316.90 and the Nasdaq Composite Index gained 98.44 points to 9,357.13. All three indexes closed at record highs.

Volume on the New York Stock Exchange totaled 2.82 billion shares with 2,056 issues advancing, 293 setting new highs, and 878 declining, with six setting new lows.

Active movers were led by NIO Inc. (NIO), Aurora Cannabis (ACB) and Advanced Micro Devices (AMD).

The U.S. Senate passed the United States-Mexico-Canada trade agreement by an 89-10 vote one day after U.S.-China signed a trade deal.

“Phase one is behind us and it met market expectations,” said Tom Essaye, founder of The Sevens Report. “Now the very real question of whether phase one results in an uptick in economic growth lies in front of us, and the truth is it’s unclear. Nothing in phase one will specifically add much to global growth.”

In economic data, initial jobless claims in the U.S. fell by 10,000 to 204,000 for the week ended Jan. 11, marking the fifth straight week of declines.

The Philadelphia Fed business activity index surged to 17 in January from 2.4 in the previous month.

U.S. retail sales rose by a seasonally adjusted 0.3% in December from the prior month to $529.6 billion, the Commerce Department said Thursday.

U.S. import prices rose by 0.3% in December, the biggest such gain in nine months.

The Commerce Department said business inventories slipped by 0.2% in November after edging up a revised 0.1% in October.

The National Association of Home Builders/Wells Fargo Housing Market Index slipped by 1 point on to 75 in January, but that figure is far higher than the 58 recorded last January. Any reading above 50 is considered positive.

Morgan Stanley (MS) surged by 6.5% after it posted fourth-quarter profit of $2.24 billion, or $1.30 per share, far exceeding analysts’ $0.99 estimate.

“Many, including us, are highlighting how stock prices have become expensive relative to their earnings,” said Nick Raich, CEO of The Earnings Scout, in a note. “Market bulls said not to worry because earnings would eventually catch up to price. Are they correct? This week, and in early 2020, those bulls are correct.”

Overnight in Asia, markets finished mixed. China’s Shanghai Composite dropped 0.52%, while Hong Kong’s Hang Seng rose 0.38%, and Japan’s Nikkei-225 edged up 0.07%.

In Europe markets closed mixed, as Britain’s FTSE-100 dropped 0.43%, France’s CAC-40 edged up 0.11% and Germany’s DAX fell 0.02%.

Crude oil futures rose 1.09% at $58.44 per barrel and Brent crude was flat at $64.62. Gold futures edged down 0.03%.

The euro slipped 0.12% at $1.1138 while the pound sterling edged up 0.29% at $1.3075.

The yield on the 10-year Treasury rose 1.17% to 1.809% while yield on the 30-year Treasury gained 0.85% to 2.261%.