US stock indexes open higher on first trading day of 2020

US stock indexes open higher on first trading day of 2020
FILE - In this Dec. 11, 2019, file photo trader Sal Suarino works on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Thursday, Jan. 2, 2020. (AP Photo/Richard Drew, File)

NEW YORK (AP) — Stocks are opening higher on Wall Street on the first trading day of the year following gains overseas. Traders are looking forward to an an initial trade deal between the U.S. and China being signed later this month, and they were also encouraged by China’s central bank saying it will free up more money for lending . The S&P 500 rose 17 points, or 0.6%, to 3,248. The Dow Jones Industrial Average rose 145 points, or 0.5%, to 28,679. The Nasdaq composite added 79 points, or 0.9%, to 9,052. Bond prices rose. The yield on the 10-year Treasury fell to 1.88%.

THIS IS A BREAKING NEWS UPDATE. AP’s earlier story follows below.

Global shares rose Thursday on optimism about a U.S.-China trade deal and the Chinese government’s efforts to boost its economy.

France’s CAC 40 rose 1.4% to 6,058 on the new year’s first day of trading, while Germany’s DAX was 1% higher at 13,382. Britain’s FTSE 100 added 1% as well, to 7,617.

U.S. shares were set to drift higher, with Dow and S&P 500 futures both up 0.6%.

Australia’s S&P ASX 200 gained 0.1% to 6,690.60, while South Korea’s Kospi lost 1.0% to 2,175.17. Hong Kong’s Hang Seng jumped 1.1% to 28,511.92, while the Shanghai Composite gained 1.2% to 3,085.20. Tokyo was still closed for the New Year’s holiday.

Market sentiment has been on an upswing after U.S. President Donald Trump said an initial trade deal with China would be signed this month. The “Phase 1” trade deal calls for the U.S. to reduce tariffs and China to buy larger quantities of U.S. farm products.

Adding to the optimism was China’s central bank announcement Wednesday it will cut the amount of money banks will be required to have on hand from Jan. 6 in an effort to boost the slowing economy.

The People’s Bank of China said the reserve requirement ratio for financial institutions would be lowered by 50 basis points, a move that’s expected to release about 800 billion yuan ($114.6 billion) into the economy for lending purposes.

That will boost the economy ahead of the Lunar New Year that 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.

Weighing on the optimism was an announcement earlier in the week from North Korean leader Kim Jong Un that his country will soon reveal a new strategic weapon and that North Korea was no longer obligated to maintain a self-imposed suspension on the testing of nuclear weapons and intercontinental ballistic missiles.

But some market observers said Kim’s comments were not specific enough to dampen optimism.

“The clear lack of details on both the threat itself and the timing, over and above the evident desensitized state of the market in previous tests, underpins this lack of reaction,” Jingyi Pan, market strategist at IG in Singapore, said.

U.S. trading was closed Wednesday for the New Year’s holiday and opens Thursday.

Wall Street closed the books on a blockbuster 2019 for stock investors, with the broader market delivering its best returns in six years.

The S&P 500 finished with a gain of 28.9% for the year, or a total return of 31.5%, including dividends. The Nasdaq composite rose 35.3%. For both indexes it was the best annual performance since 2013.

ENERGY: Benchmark U.S. crude oil fell 1 cent to $61.05 a barrel. It lost 62 cents to settle at $61.06 per barrel on Tuesday. Brent crude, the international standard, rose 6 cents to $66.06 per barrel.

CURRENCIES: The dollar rose to 108.68 yen from 108.53 yen. It edged down to $1.1193 from $1.1231.