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S&P 500 closes at highest level since Dec. 3

Stocks jumped on optimism for a U.S.-China trade deal and a potential agreement among U.S. congressional negotiators to try and avoid another partial government shutdown.

The S&P 500 (^GSPC) rose 1.29%, or 34.93 points, as of market close. The index finished the session at 2,744.73, or the highest closing price since December 3.

The Dow (^DJI) rose 1.49%, or 372.65 points, while the Nasdaq (^IXIC) rose 1.46%, or 106.71points.

“Risk is on,” Societe Generale’s Kit Juckes said in an email.

On Monday, White House adviser Kellyanne Conway said on Fox News that President Donald Trump “wants to meet with President Xi [Jinping] very soon,” adding that Trump “wants a deal.” The statements sent equity futures higher, especially after stocks had been weighed on late last week following comments from Trump asserting that a meeting between Xi and him ahead of a March 1 deadline was “unlikely.”

Any meeting between Trump and Xi would still likely take place after March 1, after which the Trump administration could raise the rate on tariffs on billions of dollars-worth of Chinese-made goods. Axios reported over the weekend that the president’s advisers were considering holding summit between Trump and Xi in Mar-a-Lago, a Trump property in Florida, next month.

Following comments Monday, the likelihood of that or a similar meeting between the leaders of two of the largest global economies as they work to iron out a trade deal appears to have increased.

“Much of the optimism we have seen in global markets overnight and into this morning centers around the Chinese optimism that a deal could be done in time, with negotiations ramping up as the week progresses,” Joshua Mahony, senior market analyst at IG Group, wrote in an email Tuesday. “While Trump may not meet his Chinese counterpart before the March 1 deadline, Thursday’s meeting between Chinese Vice-Premier Liu and U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin points towards a willingness to come to an agreement.”

Although Xi and Trump have yet to meet again in person since agreeing to a trade ceasefire in early December at the G-20 summit, officials within their respective administrations have continued discussions. Delegations from the U.S. and China are meeting in Beijing this week, according to a White House statement Friday. U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to meet with principal-level Chinese negotiators Thursday and Friday.

Investors have also continued to monitor the unfolding of negotiations domestically among congressional lawmakers to fund the government and avoid another shutdown. A group of the top congressional appropriators said Monday night that they had reached an agreement in principle to provide funds for the government beyond Friday’s midnight deadline.

According to reports from multiple outlets citing unnamed sources, the deal includes some of Trump’s requested funds for southern border security, but does not provide the entire $5.7 billion sum the president has demanded. Trump, however, must still approve a deal passed by Congress.

STOCKS: Under Armour beats earnings expectations, Molson Coors posts light sales

Under Armour (UAA) beat expectations in fourth quarter results, earning an adjusted 9 cents per share versus consensus estimates of 4 cents per share. Revenue of about $1.39 billion also slightly exceeded estimates of $1.38 billion, according to Bloomberg data. The company also reiterated its outlook for 2019, expecting revenue growth of 3% to 4%, a gross margin improvement of about 60 to 80 basis points compared to the full year 2018’s 45.1% margin, as well as operating income of $210 million to $230 million. International sales growth has continued to buoy the athletic apparel-maker, with fourth-quarter U.S. revenue decreasing 6% to $965 million while international revenue grew 24% to $395 million.

Molson Coors (TAP) missed sales expectations in the fiscal fourth quarter, sending shares lower during early trading. The owner of Coors Light and Blue Moon reported sales of $2.42 billion for the quarter, missing expectations of $2.54 billion, according to Bloomberg data. Adjusted earnings for the fourth quarter were 84 per share, or 5 cents ahead of estimates. Net sales of $10.77 billion for the full year represented a 2.7% decrease on a constant currency basis, due in part to volume declines in the U.S. and Canada, the company said in a statement. Molson Coors said worldwide brand volume declined 1.9% to 92.1 million hectoliters in 2018. The company also said it was restating financial reports from 2016 and 2017 due to tax accounting errors relating to its MillerCoors partnership, adding that the financial impacts of the changes will not be material.

ECONOMY: U.S. small business confidence drops

Optimism among U.S. small businesses declined in January to 101.2, the lowest since November 2016, according to a report Tuesday from the National Federation of Independent Business. The “35-day partial government shutdown and financial market instability” rattled small business owners, according to the statement, adding that the institution’s uncertainty index rose seven points to 86 in January, or the fifth highest reading in the 45-year history of the survey.

Job openings in the U.S. increased 2.4% to 7.335 million as of the last business day in December, according to a report Tuesday from the Department of Labor. This far exceeded consensus estimates of new job openings of 6.846 million, according to Bloomberg data.

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

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