Wall Street rallies on hopes of global economic stimulus
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.
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 has recovered 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."
Stocks also received a boost as Washington extended by 90 days the window during which China's Huawei Technologies, blacklisted by the U.S. government in May, can buy components from U.S. companies to supply existing customers.
Shares of Apple Inc
The S&P 500 technology index rose 1.6%, while the Philadelphia semiconductor index <.SOX> rose 1.9%.
"You're really seeing some of the trade-sensitive names doing better," said Chris Zaccarelli, chief investment officer of Independent Advisor Alliance in Charlotte, North Carolina. "It's put a boost under risk assets today."
The Dow Jones Industrial Average <.DJI> rose 249.78 points, or 0.96%, to 26,135.79, the S&P 500 <.SPX> gained 34.97 points, or 1.21%, to 2,923.65 and the Nasdaq Composite <.IXIC> added 106.82 points, or 1.35%, to 8,002.81.
All of the 11 major S&P sectors were higher. Energy shares <.SPNY>, which rose 2.1% as oil prices advanced, led S&P sectors in percentage gains. Reflecting Monday's risk-on sentiment, defensive sectors such as real estate <.SPLRCR> and utilities <.SPLRCU> lagged the broader index in 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
Advancing issues outnumbered declining ones on the NYSE by a 2.81-to-1 ratio; on Nasdaq, a 2.45-to-1 ratio favoured advancers.
The S&P 500 posted 57 new 52-week highs and one new low; the Nasdaq Composite recorded 78 new highs and 60 new lows.
Volume on U.S. exchanges was 6.28 billion shares, compared to the 7.58 billion average for the full session over the last 20 trading days.
(Reporting by April Joyner; Additional reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty, Shounak Dasgupta, Dan Grebler and Cynthia Osterman)
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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.