Budget discussions being held by Washington lawmakers and news that China eliminated a law that restricted investment in commercial banks caused U.S. stocks to track higher on December 5, as these developments boosted the risk tolerance of investors.
President Barack Obama asserted that lawmakers were coming closer to resolving their budget disputes, saying that these Washington officials could "probably solve this in about a week," Bloomberg News reports.
The blue-chip S&P 500 Index had risen 0.1 percent higher for the day to reach 1,408.66 at 9:47 a.m. New York time, and Bloomberg data reveals that the trading volume of the companies represented in this group of stocks was 34 percent above the 30-day average for this point in the session.
In addition to the modest growth in the S&P 500, the Dow Jones Industrial Average rose 0.4 percent to reach 12,997.67.
"The market is looking for any semblance of economic growth," John Augustine, chief market strategist at Cincinnati, Ohio-based Fifth Third Bancorp, told Bloomberg during a phone interview.
China Banking Laws
Markets responded favorably to news that Chinese regulators eliminated a law preventing insurers from investing in commercial banks, according to the media outlet.
"Investors are weighing the growth prospects between China, Europe. U.S. Stocks are going to ebb and flow from day to day on those prospects. As Chinese leaders give support not only for relaxed standards in the financial sector but for overall economic growth next year, stocks are going to react to that," Augustine explained to Bloomberg.
Loosening these restrictions could help jumpstart Asia's largest economy, which has decelerated in growth for the last seven quarters in a row.
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