Wall Street bounces on softer trade tone

By Chuck Mikolajczak NEW YORK (Reuters) - U.S. stocks rose on Monday, as major indexes bounced following a sharp sell-off in the prior session, as U.S

Reuters August 27, 2019 01:06:08 IST
Wall Street bounces on softer trade tone

Wall Street bounces on softer trade tone

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks rose on Monday, as major indexes bounced following a sharp sell-off in the prior session, as U.S. President Donald Trump forecast a trade deal with China and somewhat cooled investor concerns after a ramp up in combativeness derailed markets last week.

Trump said after a G7 summit of world leaders in Biarritz, France, that he believed China was sincere about the desire to reach a deal, citing what he described as increasing economic pressure on Beijing and job losses there.

Shares of tariff-sensitive companies rose in response, with Apple Inc's 1.40% gain providing the biggest boost to each of the major indexes.

Chipmakers, which are heavily reliant upon China for revenue, also rose with the Philadelphia Semiconductor index <.SOX> adding 0.66% after dropping more than 4% on Friday.

Still, market participants noted the rebound was less dramatic than the drop in markets last week, and they expected recent volatility to continue.

"Six months ago, those sorts of comments would’ve weighed more heavily so there is some degree of the market looking past it and wanting some proof at this point," said Willie Delwiche, investment strategist at Robert W. Baird in Milwaukee.

"So you’ve got a great deal of uncertainty with Trump, the Fed, the economy and so investors are unsettled and are nervous so it is 'shoot first, ask questions later' kind of mentality right now."

The Dow Jones Industrial Average <.DJI> rose 144.97 points, or 0.57%, to 25,773.87, the S&P 500 <.SPX> gained 17.34 points, or 0.61%, to 2,864.45 and the Nasdaq Composite <.IXIC> added 65.86 points, or 0.85%, to 7,817.63.

Commerce Department data showed new orders for key U.S.-made capital goods rose modestly in July, while shipments fell by the most in nearly three years. The report which could provide the Federal Reserve with more fuel to cut interest rates again next month.

Concerns about the global economy slipping into recession and uncertainty over the pace of U.S. interest rate cuts have created some anxiety about how long the current U.S. expansion will last. The S&P 500 is now off more than 5% from its record high hit in late July after suffering its longest run of weekly declines since May.

Even with broad gains on Monday that saw all 11 S&P 500 sectors rise, Wall Street's fear gauge, the CBOE Volatility index <.VIX>, hit its highest level in more than a week earlier in the session.

Among other stocks, Celgene Corp rose 2.70% after Amgen Inc said it would buy the company's psoriasis drug Otezla, clearing the way for Bristol-Myers Squibb Co to go ahead with its $74 billion deal for Celgene. Shares of Bristol-Myers rose 2.71%

Advancing issues outnumbered declining ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favoured advancers.

The S&P 500 posted four new 52-week highs and 17 new lows; the Nasdaq Composite recorded 17 new highs and 134 new lows.

(Reporting by Chuck Mikolajczak; Editing by Lisa Shumaker)

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

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