Tech rally boosts Wall Street after China trade comments

By Akanksha Rana and Shreyashi Sanyal (Reuters) - Wall Street's main indexes surged on Thursday, boosted by technology stocks, as China sounded hopeful on trade negotiations with the United States, lifting investor sentiment that has been dented by growing worries of a recession. China's commerce ministry said both sides are discussing the next round of talks scheduled in September and hoped U.S. officials could cancel the planned additional tariffs to avoid an escalation.

Reuters August 30, 2019 00:07:23 IST
Tech rally boosts Wall Street after China trade comments

Tech rally boosts Wall Street after China trade comments

By Akanksha Rana and Shreyashi Sanyal

(Reuters) - Wall Street's main indexes surged on Thursday, boosted by technology stocks, as China sounded hopeful on trade negotiations with the United States, lifting investor sentiment that has been dented by growing worries of a recession.

China's commerce ministry said both sides are discussing the next round of talks scheduled in September and hoped U.S. officials could cancel the planned additional tariffs to avoid an escalation.

President Donald Trump said in a Fox News radio interview that trade talks were scheduled for Thursday "at a different level," but did not provide additional details.

Tariff-sensitive tech stocks jumped 1.84%, boosted by gains in Apple Inc and Microsoft Corp.

Chipmakers, which draw a large part of their revenue from China, also gained, sending the Philadelphia chip index up 2.76%.

"Markets are trading on hopes because they (U.S. and China) are going to be talking and for the time being things aren't getting worse," said Larry Adam, chief investment officer at Raymond James in Baltimore.

"China is giving the U.S. another chance because we have seen weaker data coming out of both sides and it is important for them to extend the olive branch."

Dollar General Corp was the top gainer among S&P 500 companies after its shares rose 10% on upbeat full-year profit forecast.

Wall Street's rise hit a bump earlier in the session after European Central Bank policy maker Klaas Knot was reported to have said that the euro zone economy did not warrant a resumption of bond purchases.

At 12:57 p.m. ET, the Dow Jones Industrial Average was up 348.64 points, or 1.34%, at 26,384.74 and the S&P 500 was up 38.89 points, or 1.35%, at 2,926.83.

The Nasdaq Composite was up 121.62 points, or 1.55%, at 7,978.50.

Still, the three main indexes are on course to log their worst monthly performance since a selloff in May, on fears that tit-for-tat tariffs will drive the global economy into recession.

Investors will keep a close watch on the monthly jobs numbers and manufacturing data next week that will provide guidance on the likelihood of another rate cut from the Federal Reserve at its mid-September meeting.

The Trump administration on Wednesday made official its additional 5% tariff on $300 billion in Chinese imports and set collection dates of Sept. 1 and Dec. 15, prompting several hundreds of U.S. companies to warn of price hikes.

A number of companies, including Best Buy Co Inc and Abercrombie & Fitch Co, that reported results earlier in the day warned of the impact from tariffs on their sales.

Shares of the U.S. consumer electronics retailer slid 8.7%, to the bottom of the S&P 500, while those of the teen retailer tumbled 15%.

Advancing issues outnumbered decliners by a 3.81-to-1 ratio on the NYSE and by a 3.10-to-1 ratio on the Nasdaq.

The S&P index recorded 22 new 52-week highs and no new low, while the Nasdaq recorded 33 new highs and 39 new lows.

(Reporting by Akanksha Rana, Sruthi Shankar and Shreyashi Sanyal in Bengaluru; Editing by Anil D'Silva and Shounak Dasgupta)

This story has not been edited by Firstpost staff and is generated by auto-feed.

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