US STOCKS-Wall Street touches record high on trade optimism

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* Trump says U.S. 'very close' to trade deal with China
* U.S. offers to cancel new round of China tariffs - WSJ
* Eight of 11 major S&P 500 sectors trading higher
* Indexes up: Dow 0.47%, S&P 500 0.57%, Nasdaq 0.41%

(Updates to early afternoon, adds comments)
By Shreyashi Sanyal
Dec 12 (Reuters) - U.S. stocks hit record highs on Thursday
after President Donald Trump tweeted that Washington was "very
close" to a trade deal with Beijing and on a report that U.S.
trade negotiators had offered to cancel a new round of tariffs
on Chinese goods.
The three main indexes opened lower but quickly gained
ground after Trump's statement, which comes just days before the
tariffs kick in on Dec. 15. The Wall Street Journal reported that U.S. negotiators have
offered to slash existing levies by as much as half on roughly
$360 billion of Chinese-made goods, supporting the rise.

"What Trump is saying and what China is responding to would
suggest that maybe we are more at a status quo level of a
detente than at further deterioration in relationships," said
Willie Delwiche, investment strategist at Baird in Milwaukee,
Wisconsin.
"We want to see evidence that things aren't deteriorating
and if tariffs are getting delayed or rolled back, that's
evidence."
The record run in U.S. stocks recently has been buoyed by
three interest rate cuts this year, a calmer tone on trade and
better-than-feared corporate earnings. The S&P 500 index .SPX
is now up 26% so far in 2019. However, investors are particularly sensitive about
potential end-of-year weakness after the final month of 2018 was
the worst December on Wall Street since the Great Depression.
"We're backing off the highs of the day just on the
recognition that Trump has been crying wolf for 18 months now,"
said Robert Phipps, director at Per Stirling Capital Management
in Austin, Texas.
The Federal Reserve kept interest rates steady on Wednesday
and pointed to a "favorable" economic outlook next year.
Only defensive plays such as real estate .SPLRCR ,
utilities .SPLRCU and consumer staples .SPLRCS were trading
lower, suggesting heightened risk appetite among investors.
The Dow Jones Industrial Average .DJI was up 132.35
points, or 0.47%, at 28,043.65, the S&P 500 .SPX was up 17.81
points, or 0.57%, at 3,159.44 and the Nasdaq Composite .IXIC
was up 35.80 points, or 0.41%, at 8,689.85.
Shares of Delta Air Lines Inc DAL.N rose 3.3% as the
carrier forecast a rise in profit and revenue in 2020.
Advancing issues outnumbered decliners by a 1.69-to-1 ratio
on the NYSE and by a 1.77-to-1 ratio on the Nasdaq.
The S&P index recorded 77 new 52-week highs and two new
lows, while the Nasdaq recorded 169 new highs and 47 new lows.