Wall Street rises after Trump's softer stance on trade

By Akanksha Rana (Reuters) - Wall Street's main indexes rose 1% on Monday as U.S. President Donald Trump eased his stance on trade with China, calming investor nerves after an intense feud between the world's top two economies last week sent stocks tumbling

Reuters August 27, 2019 00:06:45 IST
Wall Street rises after Trump's softer stance on trade

Wall Street rises after Trumps softer stance on trade

By Akanksha Rana

(Reuters) - Wall Street's main indexes rose 1% on Monday as U.S. President Donald Trump eased his stance on trade with China, calming investor nerves after an intense feud between the world's top two economies last week sent stocks tumbling.

Shares of tariff-sensitive companies rose in response, with Apple Inc's 2.1% gain boosting technology stocks, while a 1% rise in Boeing Co lifted the Dow Jones Industrial Average.

Chipmakers, which heavily rely on China for their revenue, rose, with the Philadelphia Semiconductor index adding 1.1%.

Trump said on Monday Beijing had contacted Washington overnight to say it wanted to return to the negotiating table, adding that talks between the two countries were "more meaningful" than any time.

The U.S. president also said he was confident that China was sincere about wanting a trade deal with the United States.

"If there is one thing we have learned over the last year or so is things can change very quickly," said Mike Loewengart, vice president, investment strategy at E*Trade Financial Corp.

"The sentiment is optimism on account of the hopes that there will be some progress on the trade front, coupled with some encouraging economic metrics that reinforced the strength."

Data from the Commerce Department 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 could back the case for the Federal Reserve 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 made investors nervous about how far the longest cycle of U.S. expansion would survive. The S&P 500 is now 5% off its record high.

The benchmark index logged its worst run of weekly losses on Friday since a selloff in late May as both sides threatened to slap more tariffs on each other's goods.

Despite the broad-based rally on Monday that saw all 11 S&P 500 sectors rise, Wall Street's fear gauge, the CBOE Volatility index, hit its highest level in more than a week, earlier in the session.

"This is the type of market environment that is likely to persist. We would advise investors to prepare for a protracted trade war and we can expect additional market volatility," Loewengart added.

The Dow Jones Industrial Average rose 266.54 points, or 1.04%, to 25,895.44, the S&P 500 gained 28.34 points, or 1.00%, to 2,875.45 and the Nasdaq Composite added 89.97 points, or 1.16%, to 7,841.73.

Among other stocks, Celgene Corp rose 2.9% after Amgen Inc said it would buy the company's psoriasis drug Otezla, clearing the way for Bristol-Myers Squibb to go ahead with its $74 billion deal for Celgene. Shares of Bristol-Myers jumped 2.9%.

Shares of Dish Network Corp jumped 3.7%, after brokerage Raymond James double upgraded the stock to "strong buy" from "market perform."

Advancing issues outnumbered decliners for a 2.33-to-1 ratio on the NYSE and a 2.00-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and 17 new lows, while the Nasdaq recorded 15 new highs and 120 new lows.

(Reporting by Akanksha Rana and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Shounak Dasgupta)

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.