Wall Street rallies as investors cheer global stimulus efforts

By April Joyner NEW YORK (Reuters) - U.S. stocks climbed on Monday as reports of stimulus efforts in China and Germany calmed fears of a severe downturn in the global economy that were stoked last week as bond yields fell. The benchmark S&P 500 was on track to recover most of its losses following Wednesday's brief inversion of the yield curve between 2-year and 10-year Treasuries, commonly viewed as an indicator of a recession within the next two years.

Reuters August 20, 2019 02:05:11 IST
Wall Street rallies as investors cheer global stimulus efforts

Wall Street rallies as investors cheer global stimulus efforts

By April Joyner

NEW YORK (Reuters) - U.S. stocks climbed on Monday as reports of stimulus efforts in China and Germany calmed fears of a severe downturn in the global economy that were stoked last week as bond yields fell.

The benchmark S&P 500 was on track to recover most of its losses following Wednesday's brief inversion of the yield curve between 2-year and 10-year Treasuries, commonly viewed as an indicator of a recession within the next two years. After falling nearly 3% on Wednesday, the S&P 500 has risen for the last three sessions.

China's central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies. On Sunday, German Finance Minister Olaf Scholz suggested that Berlin could make available up to 50 billion euros ($55 billion) of extra spending.

"Those are positive stories, and it's fostered a risk-on environment that has persisted throughout the day," said Michael O'Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut. "Investors are glad to see that countries are recognising the risks out there."

Shares of Apple Inc provided the biggest boost to the three main Wall Street indexes. President Donald Trump said on Sunday that he had spoken with Apple Chief Executive Officer Tim Cook, who "made a good case" that tariffs could hurt Apple.

Technology shares also rose as Washington extended a reprieve given to Huawei Technologies [HWT.UL] that permits the Chinese firm to buy supplies from U.S. companies so it can service existing customers.

The S&P 500 technology index rose 1.5%, while the Philadelphia semiconductor index <.SOX> rose 1.8%.

The Dow Jones Industrial Average <.DJI> rose 266.72 points, or 1.03%, to 26,152.73, the S&P 500 <.SPX> gained 36.54 points, or 1.26%, to 2,925.22 and the Nasdaq Composite <.IXIC> added 109.85 points, or 1.39%, to 8,005.84.

All of the 11 major S&P sectors were higher. Energy shares <.SPNY>, which rose 2.3% as oil prices advanced, led S&P sectors in percentage gains. Reflecting Monday's risk-on sentiment, the defensive real estate <.SPLRCR> and utilities <.SPLRCU> sectors posted the smallest percentage gains.

Given concerns about economic growth, investors have looked closely for cues from the Federal Reserve on monetary policy. In July, the U.S. central bank cut interest rates for the first time in more than a decade.

Wednesday's release of minutes from the Fed's July policy meeting, as well as Chair Jerome Powell's speech at the Jackson Hole symposium on Friday, might provide indications on whether the central bank will cut rates further, investors said.

Shares of Estee Lauder Cos Inc jumped 12.4% to a record high as the beauty company forecast full-year revenue and profit above estimates, bolstered by booming demand for its premium skincare products in the Asia-Pacific region.

Advancing issues outnumbered declining ones on the NYSE by a 2.91-to-1 ratio; on Nasdaq, a 2.71-to-1 ratio favoured advancers.

The S&P 500 posted 53 new 52-week highs and one new low; the Nasdaq Composite recorded 74 new highs and 52 new lows.

(Reporting by April Joyner; Additional reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta and Dan Grebler)

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

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Shell halts offshore drilling as U.S. Gulf Coast braces for hurricane
Business

Shell halts offshore drilling as U.S. Gulf Coast braces for hurricane

HOUSTON (Reuters) - Royal Dutch Shell Plc began shutting some of its offshore drilling operations on Sunday in preparation for Tropical Storm Sally, forecast to become a hurricane before making landfall on Tuesday, the company said. Shell's offshore production was unchanged and all personnel remained on production platforms, company spokeswoman Cynthia Babski said. Energy producers and communities along the U.S.

Once an American foe, now a friend: OPEC turns 60
Business

Once an American foe, now a friend: OPEC turns 60

By Alex Lawler LONDON (Reuters) - In 1973, Arab members of the Organization of Petroleum Exporting Countries brought the U.S.

SoftBank executives renew talks on taking the group private - FT
Business

SoftBank executives renew talks on taking the group private - FT

(Reuters) - Executives of SoftBank Group Corp are once again considering taking the technology group private as the Japanese company seeks a new strategy after disposing of several large assets, the Financial Times reported https://on.ft.com/2ZAauvz on Sunday citing people familiar with the matter. The discussions are driven by frustrations over the continuous discount in SoftBank's equity valuation compared with the value of its individual holdings, which continues even after an asset sale programme tried to close that gap, the newspaper said. The talks on taking the company private have also been speeded up due to number of fundamental changes to SoftBank's long-term business strategy, FT reported citing people close to the company's senior management