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May 22, 2018

Stocks open higher after China says that cuts to tariffs on autos are coming - May 22, 2018 - | Breaking News | CNBC | U.S. Market

cnbc.com

Stocks open higher after China says that cuts to tariffs on autos are coming

Silvia Amaro

Stocks opened higher on Tuesday, building on strong gains from the previous session, after China said it will reduce levies on automakers and car parts.
The Dow Jones industrial average rose 36 points, with General Electric as the best-performing stock in the index. The S&P 500 gained 0.2 percent as tech rose half a percent. The Nasdaq composite advanced 0.4 percent.
The Chinese Finance Ministry said tariffs on certain vehicles will come down to 15 percent from as much as 25 percent while levies on some parts will be brought down to 6 percent effective July 1.
Shares of Ford, General Motors and Tesla all rose on the news, gaining about 1 percent Tuesday.
The announcement by China comes after Treasury Secretary Steven Mnuchin told CNBC on Monday the U.S. has made "very meaningful progress" with China on trade matters, noting: "Now it's up to both of us to make sure that we can implement it."
Spencer Platt | Getty Images News | Getty Images
Mnuchin's comments helped push the Dow up nearly 300 points as Wall Street interpreted the remarks as tensions between the U.S. and China easing. The Dow also closed above 25,000 for the first time since March on Monday.
"We may already be getting some relief on one of the major issues that has weighed on the market since early February, when President Donald Trump threatened to impose tariffs on the US's major trading partners," Ed Yardeni, president and chief investment strategist at Yardeni Research.
Rising trade tensions between the U.S. and China, coupled with rising rates and inflationary fears, pushed stocks off of record highs earlier this year. Since then, the major indexes have recovered slightly from those losses.
In corporate news, shares of Lowe's rose 3.3 percent after the company announced that J.C. Penney CEO Marvin Ellison would become its new chief executive. The news also sent J.C. Penney's stock down 7.2 percent.

Watch: The market's 'fear gauge' may be signaling caution for stocks