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Full Steam. U.S. stocks powered ahead again on Thursday, after the Dow Jones Industrial Average closed above 29,000 for the first time on Wednesday. The Senate passed a key overhaul of North America’s trade rules. U.S. retail sales remained solid in December. Morgan Stanley stock (ticker: MS) soared after the bank beat Wall Street earnings expectations. In today’s After the Bell, we...

Pair of Aces

All three major indexes closed with solid gains on Thursday on the heels of not one, but two pieces of good news regarding trade. The Dow Jones Industrial Average rose 267.42 points, or 0.92%, to close at 29,297.64. The S&P 500 has grown 27.52 points, or 0.84%, to end at 3316.81, and the Nasdaq Composite added 98.44 points, or 1.06%, to close at 9357.13.

As widely expected, the Senate passed the so-called USMCA Agreement on Thursday, voting 89 to 10 in support of the trade pact, which replaces the 26-year-old North American Free Trade Agreement. This bill will now be sent to President Donald Trump’s desk and he is expected to sign into law. The president has been advocating for the new agreement since his presidential campaign in 2016.

The pact’s passage marks a rare bipartisan cooperation on Capitol Hill as Democrats are planning an impeachment trial against Trump, expected to begin next week. U.S., Canada, and Mexico first agreed to the deal in 2018, but House Speaker Nancy Pelosi had threatened to block the passage without stronger enforcement provisions to ensure Mexican factories follow through with new labor requirements. The USMCA was passed by the House last month.

The new deal will reassure tariff-free trade continues in North America, open up Canadian dairy markets to American producers, create stricter requirements for the auto industry, and update trade rules to better address today’s technological, environmental, and labor challenges.

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The passage of USMCA comes a day after Washington and Beijing signed a phase-one trade deal under which China has agreed to purchase more American products, open up its market to foreign investment, and strengthen the protection of intellectual property and trade secrets. In exchange, the U.S. will cut existing tariffs on $120 billion worth of Chinese goods to 7.5% from 15%.

Two trade deals in a row—although widely anticipated—have boosted investor sentiment that the economy might be able keep humming for a while. Stocks rose on Thursday, gold prices retreated, and U.S. Treasury yields increased.

After being plagued by tariffs and policy uncertainties for nearly two years, multinational companies are finally seeing some brighter days ahead. Improved corporate sentiment should drive up capital spending, which will benefit bank stocks with more loans taken out, as well as energy stocks as global economic growth lifts oil demand.

What’s more, consumer spending in the U.S. remained resilient, as retailers reported solid sales in the final month of 2019, according to data released by the Commerce Department. Total U.S. retail and food-services sales rose 0.3% last month from November, largely matching economists’ expectations and allaying concerns that shoppers held back on spending during the most crucial time of the year.

Write to Evie Liu at evie.liu@barrons.com