Stocks

US stocks rallies after China trade comments

Reuters New York | Updated on August 30, 2019

The S&P 500 posted 27 new 52-week highs and no new lows; the Nasdaq Composite recorded 40 new highs and 59 new lows.   -  Reuters

The Dow Jones Industrial Average rose 326.15 points

United States (US) stocks rallied more than 1 per cent on Thursday, buoyed by gains in the trade-sensitive technology and industrial sectors as China expressed hope on trade negotiations with the United States, easing concerns that rising tensions could stoke a recession.

China's commerce ministry said both sides are discussing the next round of talks scheduled for September, but progress would be determined by whether Washington could create favorable conditions.

US President Donald Trump said that trade talks were scheduled for Thursday “at a different level,” but did not provide details.

Some analysts cautioned that the comments from China were light on substance, and pointed to month-end rebalancing on Friday as supportive of stock gains.

“It sounds to me like more of a continued slow-walking. But clearly it is time to not ratchet things up further,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.

Heavyweight tech stocks with tariff exposure, such as Apple Inc, up 1.69 per cent, and Microsoft, up 1.89 per cent, boosted the technology sector by 1.73 per cent for its best day since Aug. 16.

Chipmakers, which draw a large part of their revenue from China, also gained, sending the Philadelphia semiconductor index up 2.25 per cent.

Industrial names that have also been highly correlated to trade progress, such as United Technologies, advanced, with the sector up 1.77 per cent.

The Dow Jones Industrial Average rose 326.15 points, or 1.25 per cent, to 26,362.25, the S&P 500 gained 36.63 points, or 1.27 per cent, to 2,924.57 and the Nasdaq Composite added 116.51 points, or 1.48 per cent, to 7,973.39.

Still, the three main indexes were on course to log their worst monthly performance and first monthly decline since a sell-off in May, on worries the intensified trade battle between the world's two largest economies will lead to a global recession.

The Trump administration on Wednesday made official its additional 5 per cent tariff on $300 billion in Chinese imports and set collection dates of September 1 and December 15, prompting several hundreds of US companies to warn of price hikes.

A number of companies, including electronics retailer Best Buy Co Inc and teen apparel retailer Abercrombie & Fitch Co, reported results earlier on Thursday and warned of the impact from tariffs.

Shares of Best Buy slid 7.99 per cent, making it one of the worst performing issues on the S&P 500, while those of Abercrombie tumbled 15.10 per cent.

Dollar General Corp was the best performer among S&P 500 companies, rising 10.68 per cent on an upbeat full-year profit forecast. The S&P retail index climbed 1.67 per cent.

Advancing issues outnumbered declining ones on the New York Stock Exchange (NYSE) by a 3.23-to-1 ratio; on Nasdaq, a 2.69-to-1 ratio favored advancers.

The S&P 500 posted 27 new 52-week highs and no new lows; the Nasdaq Composite recorded 40 new highs and 59 new lows.

About 6.01 billion shares changed hands on US exchanges, compared with the 7.23 billion daily average over the last 20 sessions.

Published on August 30, 2019

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor