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Stock market news: December 4, 2019

Stocks rose Wednesday for the first time in four sessions amid more upbeat reports on the status of progress in a U.S.-China trade deal.

Here’s where the markets settled at the end of regular equity trading:

  • S&P 500 (^GSPC): +0.63%, or 19.56 points

  • Dow (^DJI): +0.53%, or 146.97 points

  • Nasdaq (^IXIC): +0.54%, or 46.03 points

  • 10-year Treasury yield (^TNX): +6.2 bps to 1.771%

  • Gold (GC=F): -0.3% to $1,480.00 per ounce

U.S. negotiators expect that a phase one deal with China will be completed before more tariffs on Chinese goods are set to take effect December 15, Bloomberg reported Wednesday, citing unnamed people familiar with the matter.

Stock futures had risen during early trading in the wake of the report, reversing some of Tuesday’s steep losses sparked after President Donald Trump suggested a trade agreement could be delayed until at least the 2020 presidential elections, and after Commerce Secretary Wilbur Ross said earlier this week that the Trump administration would move forward with implementing new tariffs in absence of a breakthrough by mid-December.

The people cited in Bloomberg’s report also downplayed the notion that recent legislation aimed at sanctioning some Chinese officials would hinder progress in a trade deal.

The U.S. House of Representatives on Wednesday approved a bill that would sanction Chinese officials for human rights abuses against Uighurs, a Muslim ethnic group in western China, sparking threats of retaliation from Beijing.

A spokesperson for China’s foreign ministry said China was “strongly indignant and firmly opposed” to the bill, according to state-run media outlet Xinhua.

Traders work on the floor of the New York Stock Exchange shortly after the opening bell in New York, U.S., December 3, 2019. REUTERS/Lucas Jackson

“We urge the U.S. to correct its mistakes at once, prevent this bill from becoming law, and stop using Xinjiang-related issues to interfere in China's internal affairs,” the spokesperson said. “China will take further actions according to how the situation develops."

Another state-run media outlet, the Global Times, suggested China would speed up the release of an “unreliable entity list,” which could impose new sanctions on U.S. companies in response to the congressional legislation.

A Reuters report on Wednesday citing people familiar with Beijing’s position suggested the passage of the bill could complicate talks for reaching an interim trade deal with the U.S. The revised House version of the bill must still be approved by the Senate before being sent to Trump.

ECONOMY: U.S. private employers add far fewer jobs than expected in November

Private sector employment in the U.S. rose by just 67,000 positions in November, ADP/Moody’s reported Wednesday, as small businesses and manufacturing industries lost jobs during the month. This reading marked the lowest level in six months, and was well short of the 135,000 private job gains expected by consensus economists, according to Bloomberg data. October’s private sector job gains were downwardly revised by 4,000 to 121,000.

The goods-producing sector lost a total of 18,000 positions during the month, with each of natural resources, construction and manufacturing industries losing 6,000 jobs.

The service sector gained 85,000 total positions. However, trade, transportation and utilities service industries lost 15,000 positions, and information tech jobs were down by 8,000.

One bad month is not a trend, but the forward-looking surveys signal no relief over the next couple of months, at least,” Ian Shepherdson, chief economist for Pantheon Macroeconomics, wrote in an email Wednesday. “This is not about supply-side constraints, with firms unable to find all the people they want; labor demand clearly has weakened as the trade war has dampened activity, both directly via the cost of the tariffs and indirectly by creating great uncertainty for businesses.”

The ADP report comes two days ahead of the Labor Department’s “official” jobs report Friday. Consensus economists are looking to see 190,000 new non-farm payrolls and 178,000 new private payrolls. The ADP/Moody’s report has typically been an imperfect indicator of the Labor Department’s results due to differences in methodology.

U.S. service sector activity expanded in November at a faster pace, driven by a rise in new orders and growth in employment, IHS Markit reported Wednesday. The firm’s final November services Purchasing Managers’ Index registered at 51.6 for November from 50.6 in October, matching consensus economist expectations. Readings above the neutral level of 50 indicate expansion in a sector.

The report comes just two days after IHS Markit reported U.S. manufacturing sector activity rose by the most in seven months.

“With both services and manufacturing reporting stronger rates of expansion, the November PMI surveys indicate the fastest pace of economic growth in four months,” Chris Williamson, chief business economist at IHS Markit, said in a statement.

However, “business expectations for the year ahead continue to run at one of the lowest levels recorded by the survey since 2012 with firms worried about trade wars, slowing economic growth at home and abroad, as well as the possibility of next year’s election cycle causing customers to postpone spending decisions,” he added.

Meanwhile, the Institute for Supply Management’s report on non-manufacturing activity showed a decline in activity in November versus October. The ISM non-manufacturing PMI registered at 53.9 in November, short of the 54.5 reading expected and October’s print of 54.7. The decline in the ISM index was driven by a further deceleration in supplier deliveries and a continued contraction in order backlogs.

Splitting up has been the predominant trend of the past 10 years.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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