Wall Street jumps on German stimulus hopes

By Stephen Culp NEW YORK (Reuters) - Technology shares led Wall Street's advance on Friday as a waning bond rally and news of potential German economic stimulus brought buyers back to the market at the close of a turbulent week. While all three major U.S. stock averages were sharply higher, they are still on track to post their third straight weekly declines, having been battered since Monday by accelerating U.S.-China trade animosity, simmering geopolitical tensions and signals from the bond market that sparked fears of imminent recession.

Reuters August 17, 2019 00:08:10 IST
Wall Street jumps on German stimulus hopes

Wall Street jumps on German stimulus hopes

By Stephen Culp

NEW YORK (Reuters) - Technology shares led Wall Street's advance on Friday as a waning bond rally and news of potential German economic stimulus brought buyers back to the market at the close of a turbulent week.

While all three major U.S. stock averages were sharply higher, they are still on track to post their third straight weekly declines, having been battered since Monday by accelerating U.S.-China trade animosity, simmering geopolitical tensions and signals from the bond market that sparked fears of imminent recession.

Germany's coalition government is willing to suspend its balanced budget rule and take on debt, according to Der Spiegel magazine, raising hopes that Europe's largest economy could steer itself away from recession and cooling worries over a global economic slowdown, for now.

"Germany's willingness to shift away from long-held practices magnifies the fact that the level of economic uncertainty throughout Europe is quite high," said David Carter, chief investment officer at Lenox Wealth Advisors in New York.

"It's a bit like the Fed lowering rates more than expected," Carter added. "Great headline, but further analysis may eventually create uncertainty and weaken markets."

German stimulus hopes helped the benchmark 10-year U.S. Treasury yield rise from three-year lows, closing the book on a fraught week which saw 10-year yields dip below those of two-year notes, a classic recessionary red flag.

Rising bond yields gave a boost to rate-sensitive banks, sending the S&P 500 Banks index <.SPXBK> up 2.7%

The Dow Jones Industrial Average <.DJI> rose 275.17 points, or 1.08%, to 25,854.56, the S&P 500 <.SPX> gained 39.7 points, or 1.39%, to 2,887.3 and the Nasdaq Composite <.IXIC> added 130.42 points, or 1.68%, to 7,897.04.

All 11 major sectors of the S&P 500 were firmly in the black, with financials <.SPSY>, industrials <.SPLRCI> and technology <.SPLRCT> enjoying the largest percentage gains

Nvidia Corp jumped 6.7% after the chipmaker's quarterly results bested analyst estimates, helping the Philadelphia chip index <.SOX> gain 2.8%.

Deere & Co cut its earnings forecast after missing Street profit estimates in the face of the ongoing U.S.-China trade war. Still, the farm equipment maker's decision to cut costs sent the stock up 3.5%.

General Electric Co surged by 8.7% after Chief Executive Officer Larry Culp bought nearly $2 million in shares in the wake of the conglomerate's worst one-day percentage drop in 11 years.

The second-quarter earnings season approaches the finish line, with 459 of the companies in the S&P 500 having posted results. Of those, 73% beat Street estimates, according to Refinitiv data.

Analysts now see S&P 500 second-quarter earnings growth of 2.9% year-on-year, per Refinitiv.

Advancing issues outnumbered declining ones on the NYSE by a 3.58-to-1 ratio; on Nasdaq, a 4.00-to-1 ratio favored advancers.

The S&P 500 posted 32 new 52-week highs and 7 new lows; the Nasdaq Composite recorded 33 new highs and 87 new lows.

(Reporting by Stephen Culp; Editing by Tom Brown)

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

Updated Date:

TAGS:

also read

France, Germany to agree to NATO role against Islamic State - sources
| Reuters
World

France, Germany to agree to NATO role against Islamic State - sources | Reuters

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

China's Xi says navy should become world class
| Reuters
World

China's Xi says navy should become world class | Reuters

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.