Global Shares Mixed As US-China Trade Deal Optimism Fades

TOKYO (AP) — Global shares were mixed Wednesday after Wall Street logged fresh record highs but investor optimism faded about an interim U.S.-China trade deal announced last week.

France's CAC 40 was slightly higher in early trading at 5,969.59, while Germany's DAX slipped 0.2% to 13,261.33. Britain's FTSE 100 edged up 0.1% to 7,535.21.

U.S. shares were set to drift slightly higher with Dow futures inching up to 28,288. S&P 500 futures were also slightly higher at 3,195.90.

Japan's benchmark Nikkei 225 fell 0.6% to finish at 23,934.43. Australia's S&P/ASX 200 gained nearly 0.1% to 6,851.40. South Korea's Kospi inched down to 2,194.76. Hong Kong's Hang Seng recouped earlier losses and edged up 0.2% to 27,884.21, while the Shanghai Composite fell 0.1% to 3,017.04. Shares were higher in Thailand, India, Indonesia and the Philippines.

Wall Street extended its milestone-shattering run Tuesday, nudging the major indexes to record highs.

The S&P 500 had its fifth gain in a row, adding less than 0.1% to 3,192.52. With less than three weeks left in 2019, the index is up 27.4% for the year. The benchmark index and the Nasdaq closed at new highs for the fourth straight day, with the Nasdaq climbing 9.13 points or 0.1% to 8,823.36. .

The Dow Jones Industrial Average rose 31.27 points, or 0.1%, to 28,267.16, also a record high, its second milestone this week.

The Russell 2000 index of smaller company stocks picked up 7.63 points, or 0.5%, closing at 1,657.56.

A Federal Reserve meeting last week also spurred buying after investors saw signals from Chairman Jerome Powell that interest rates will stay low for a while.

“A lot of the strength that we're seeing is just a continuation of the ‘Phase 1’ U.S.-China deal from last week and some potential clarity around Brexit,” said Jamie Lavin, global investment specialist at J.P. Morgan Private Bank.

Japan reported that its exports fell nearly 8% in November from a year earlier, while imports fell nearly 16% in fresh evidence that trade tensions in the region are taking a toll on manufacturers.

“The after-effects of Japan's sales tax increase, a slowdown in global trade and smoke and mirrors on the latest stimulus package continue to make their presence felt," Jeffrey Halley of Oanda said in a commentary.

The U.S. and China agreed last week to cut tariffs on some of each others' goods and postpone other tariff threats. The interim trade deal has helped ease a key source of uncertainty for investors heading into next year.

The latest batch of economic data also helps buttress traders’ confidence in the health of the U.S. economy. In August, fears that the U.S. was headed for recession roiled markets.

The Fed said Tuesday that industrial production and manufacturing were stronger last month than economists expected, though they are weaker than a year ago. Industrial production rebounded to 1.1% growth in November from October, better than the 0.8% that the market was expecting. But it remains 0.8% below year-ago levels.

U.S. housing data were also stronger than expected. Homebuilders broke ground on 3.2% more homes in November than October, well above the 1.2% growth that economists had projected. In addition, applications for building permits jumped to the highest level in 12 years.

ENERGY: Benchmark U.S. crude lost39 cents to $60.55 a barrel. It rose 73 cents to $60.94 per barrel Tuesday. Brent crude, the international standard, fell 28 cents to $65.82 per barrel.

CURRENCIES: The dollar fell to 109.45 yen from 109.49 yen on Tuesday. The euro slipped to $1.1131 from $1.1151.