S&P 500 hits record on trade optimism, Fed rate-cut expectations
By Chuck Mikolajczak (Reuters) - The S&P 500 hit a record high on Monday, while the Nasdaq hovered just below its lifetime high touched in late July, as a more conciliatory tone between the United States and China buoyed hopes for a possible trade deal and investors anticipated a rate cut by the Federal Reserve later this week. Microsoft Corp shares climbed 2.54%, making the stock among the biggest boosts to each of three major indexes after the technology giant won the Pentagon's $10 billion (£7.78 billion) cloud computing contract, beating out Amazon.com Inc . The S&P 500 rose as much as 0.7% to 3,044.08, breaching the record intraday high hit on July 26, while the Nasdaq was less than 0.2% below its intraday high
By Chuck Mikolajczak
(Reuters) - The S&P 500 hit a record high on Monday, while the Nasdaq hovered just below its lifetime high touched in late July, as a more conciliatory tone between the United States and China buoyed hopes for a possible trade deal and investors anticipated a rate cut by the Federal Reserve later this week.
The S&P 500 rose as much as 0.7% to 3,044.08, breaching the record intraday high hit on July 26, while the Nasdaq was less than 0.2% below its intraday high. The Dow Jones Industrial Average was less than 1% away from its record intraday level.
President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing, building on optimism from Friday when Washington said it was "close to finalizing" some parts of a trade deal.
Economic data shows that the trade war between the two largest economies has begun take a toll on both countries, leading to worries about a global slowdown.
Global central banks have responded by easing monetary policy. The Federal Reserve is expected to be the latest to follow that trend at its two-day policy meeting beginning on Tuesday, with wide expectations that it will cut interest rates for a third time this year.
"It just seems like the things that would disrupt the rally – tightening monetary policy - off the table. Some kind of big battle with the Chinese seems to be off the table, some kind of political upheaval seems be off the table," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. "All of that means the line of least resistance is higher."
The Dow Jones Industrial Average <.DJI> rose 140.72 points, or 0.52%, to 27,098.78, the S&P 500 <.SPX> gained 18.44 points, or 0.61%, to 3,040.99 and the Nasdaq Composite <.IXIC> added 86.04 points, or 1.04%, to 8,329.16.
The odds for a quarter percentage point cut in U.S. borrowing costs have jumped to 94.1% from 49.2% last month, according to CME Group's FedWatch tool.
The third-quarter earnings season has managed to ease some concerns related to the impact of the trade tensions on corporate profits, with over 78% of the 204 S&P 500 companies that have reported so far surpassing profit expectations, according to Refinitiv data. Still, third-quarter earnings are expected to show a decline of 2%.
Investors are waiting for earnings from heavyweights this week such as Apple Inc
Chipmakers, which have acted as a proxy for trade tensions with China, gained 1.67%. The technology <.SPLRCT>, healthcare <.SPXHC> and communication services <.SPLRCL> sectors gained more than 1% each.
Among other stocks, AT&T Inc
Tiffany & Co
Advancing issues outnumbered declining ones on the NYSE by a 1.42-to-1 ratio; on Nasdaq, a 2.14-to-1 ratio favored advancers.
The S&P 500 posted 39 new 52-week highs and no new lows; the Nasdaq Composite recorded 111 new highs and 37 new lows.
(Reporting by Chuck Mikolajczak; Editing by Leslie Adler)
This story has not been edited by Firstpost staff and is generated by auto-feed.
By Robin Emmott and John Irish | BRUSSELS/PARIS BRUSSELS/PARIS France and Germany will agree to a U.S. plan for NATO to take a bigger role in the fight against Islamic militants at a meeting with President Donald Trump on Thursday, but insist the move is purely symbolic, four senior European diplomats said.The decision to allow the North Atlantic Treaty Organization to join the coalition against Islamic State in Syria and Iraq follows weeks of pressure on the two allies, who are wary of NATO confronting Russia in Syria and of alienating Arab countries who see NATO as pushing a pro-Western agenda."NATO as an institution will join the coalition," said one senior diplomat involved in the discussions. "The question is whether this just a symbolic gesture to the United States
BEIJING Chinese President Xi Jinping on Wednesday called for greater efforts to make the country's navy a world class one, strong in operations on, below and above the surface, as it steps up its ability to project power far from its shores.China's navy has taken an increasingly prominent role in recent months, with a rising star admiral taking command, its first aircraft carrier sailing around self-ruled Taiwan and a new aircraft carrier launched last month.With President Donald Trump promising a US shipbuilding spree and unnerving Beijing with his unpredictable approach on hot button issues including Taiwan and the South and East China Seas, China is pushing to narrow the gap with the U.S. Navy.Inspecting navy headquarters, Xi said the navy should "aim for the top ranks in the world", the Defence Ministry said in a statement about his visit."Building a strong and modern navy is an important mark of a top ranking global military," the ministry paraphrased Xi as saying.