Wall Street rallies on stimulus cheer, trade optimism
By Medha Singh (Reuters) - U.S. stocks surged on Monday, building on previous session's rally, fueled by growing hopes that major economies would act to prop up slowing growth, while technology stocks got a lift from trade optimism
By Medha Singh
(Reuters) - U.S. stocks surged on Monday, building on previous session's rally, fueled by growing hopes that major economies would act to prop up slowing growth, while technology stocks got a lift from trade optimism.
China's central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies, close on the heels of report of a potential German economic easing. The benchmark S&P 500 was looking at its best two-day jump since early June.
After the three main Wall Street indexes racked up their third straight weekly loss despite Friday's bounce, investors will weigh trade risks and signs of slowing growth against the potential for more action from the U.S. Federal Reserve and others in September.
The focus this week will be on Wednesday's release of minutes from the Fed's July policy meeting, when the central bank cut rates for the first time in more than a decade, and Chair Jerome Powell's speech in Jackson Hole on Friday.
"Everything is up because the Street is expecting Fed Chairman Powell to push for an additional cut when he addresses bankers in Jackson Hole," said Peter Kenny of Kenny's Commentary LLC and Strategic Board Solutions LLC in New York.
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.
"There is a recognition that this trade policy is having a negative impact on the economy. With the election coming up next year, there maybe an incentive to get these trade issues behind. Trump does seem to listen if the voices are loud enough," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
Adding to the optimism around trade, Washington extended a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies so that it can service existing customers.
Trade-sensitive chipmakers gained with the Philadelphia chip index up 2.06%.
At 12:36 p.m. ET, the Dow Jones Industrial Average was up 245.55 points, or 0.95%, at 26,131.56 and the S&P 500 was up 33.69 points, or 1.17%, at 2,922.37. The Nasdaq Composite was up 112.19 points, or 1.42%, at 8,008.18.
All of the 11 major S&P sectors were higher with a 1.88% rise in energy sector leading the gainers. Defensive real estate and utilities posted the smallest gains.
Estee Lauder Cos Inc jumped 10.1% as it forecast full-year revenue and profit above estimates, bolstered by booming demand for its premium skincare products and strength in its Asia-Pacific business.
Advancing issues outnumbered decliners for a 3.45-to-1 ratio on the NYSE and a 2.86-to-1 ratio on the Nasdaq.
The S&P index recorded 47 new 52-week highs and no new low, while the Nasdaq recorded 70 new highs and 40 new lows.
(Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty and Shounak Dasgupta)
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