Sep 12, 2019

U.S. Market | Wall Street Closing Report: Dow posts 7-day winning streak, inches closer to record after tariff delay and ECB rate cut

Fred Imbert

Stocks rose on Thursday, inching closer to record highs, as Wall Street digested a slew of U.S.-China trade news along with a large bond buying program from Europe’s central bank.
The Dow Jones Industrial Average traded 140 higher, or 0.5%. The S&P 500 gained 0.6% while the Nasdaq Composite advanced 0.7%.
President Donald Trump agreed on Wednesday to delay an additional increase in tariffs on Chinese goods by two weeks “as a gesture of good will.” The move raised hopes of a thaw in trade frictions between the world’s two largest economies.
Chipmakers such as Micron Technology and Advanced Micro Devices rose 0.5% and 1.9%, respectively. The tech sector was the best performer in the S&P 500, led by a 3.6% gain in PayPal. Microsoft also traded 1.5% higher.
U.S. President Donald Trump meets with China’s President Xi Jinping at the G20 leaders summit in Japan, June 29, 2019.
Kevin Lamarque | Reuters
The U.S. and China have imposed tariffs on billions of dollars’ worth of one another’s goods since the start of 2018, battering financial markets and souring business and consumer sentiment. Trade officials from both sides are expected to hold talks in Washington in early October.
“It’s a work in progress,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management, about the trade situation. “Both sides are posturing. The timing and magnitude of any new trade agreement remains unknown with no indication that either side is willing to concede on structural issues.”
Sandven added trade will impact the market “for the foreseeable future” but noted stocks have already had a “banner year.”
The Dow and S&P 500 entered Thursday’s session less than 1% from record highs reached in July. The Dow also closed above 27,000 on Wednesday for the first time since July 30 while the S&P 500 broke above 3,000 for the first time since July 31.
Stocks were subject to a brief bout of volatility earlier on Thursday after Bloomberg News had reported earlier that President Donald Trump’s advisors were considering such a deal, sending the major indexes to their session highs. The major indexes later pared those gains after a senior White House official told CNBC the administration is “absolutely not” considering an interim deal with China.
Treasury Secretary Steven Mnuchin told CNBC’s “Squawk Box” that Trump could strike a trade deal with China at any moment, but wants a “good” deal for American workers.
Elsewhere, investors digested the latest decision from policymakers at the European Central Bank. The ECB cut its deposit rate by 10 basis point and launched a new bond buying program. The bank will buy €20 billion worth of assets for as long as needed.
The euro dropped before trading 0.5% higher. Gold futures climbed 0.3% to $1,507.40 per ounce.
“The question remains whether this will be enough to reverse the damage caused by the geopolitical disturbances that have undermined corporate and investor confidence (at least towards cyclical assets) in recent months,” said Michael Shaoul, chairman and CEO of Marketfield Asset Management, in a note. “Given the extremes to which allocations were pushed in the last part of August we believe that we might have reached an important turning point that will see relative performance trends change quite markedly in the weeks ahead.”
—CNBC’s Sam Meredith contributed to this report.

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