Wall St climbs more than 1% after China moves on yuan

Reuters NEW YORK | Updated on August 07, 2019

The gains came a day after US stocks' biggest percentage drop of the year and a sharp fall in the Chinese currency. File Photo   -  Bloomberg

Tech stocks biggest boost to S&P 500

US stocks jumped more than 1 per cent on Tuesday, bouncing back from a sharp sell-off the previous day as China stepped in to stabilize the yuan, easing concerns that currencies would be the next weapon in the US-China trade war.

China's overnight intervention came after the US Treasury Department labelled Beijing a currency manipulator as it let the yuan slide to a more than decade low on Monday. “It's a signal from the Chinese side that they want to keep the yuan steady and elevated. But it also indicates how quickly things can change. That's permeating the tone in the market, and it's one of the reasons there remains that sense of trepidation,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

The gains came a day after US stocks' biggest percentage drop of the year and a sharp fall in the Chinese currency. China's move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow's comment that President Donald Trump was planning to host a Chinese delegation for talks in September allayed fears of a further escalation in the trade war.

The S&P technology index, which includes companies that have a big exposure to China and were at the heart of Monday's sell-off, provided the biggest boost to the S&P index, rising 1.61 per cent. The Dow Jones Industrial Average rose 311.78 points, or 1.21 per cent, to 26,029.52, the S&P 500 gained 37.03 points, or 1.30 per cent, to 2,881.77 and the Nasdaq Composite added 107.23 points, or 1.39 per cent, to 7,833.27.

The S&P 500 and Nasdaq each snapped a six-day losing streak. Stocks had been reeling from last week's shock when Trump vowed to slap a 10 per cent tariff on a further $300 billion in imports from China. After the bell, shares of Walt Disney fell 2.6 per cent following the release of its quarterly results.

During the regular session, Apple Inc gained 1.9 per cent after recent heavy losses, while the Philadelphia Semiconductor index edged 1.28 per cent higher. Among other stocks, Take-Two Interactive Software Inc jumped 8.0 per cent after the videogame publisher raised its full-year revenue forecast.

Advancing issues outnumbered declining ones on the NYSE by a 2.17-to-1 ratio; on Nasdaq, a 1.85-to-1 ratio favored advancers. The S&P 500 posted five new 52-week highs and 24 new lows; the Nasdaq Composite recorded 21 new highs and 198 new lows.

Volume on US exchanges was 7.93 billion shares, compared with the 6.91 billion average for the full session over the last 20 trading days.

Published on August 07, 2019

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