Wall Street rises after China trade comments, tech boost
August 29, 2019665 views0 comments
A rise in technology stocks lifted Wall Street on Thursday, as China sounded hopeful of a resolution to the protracted trade dispute with the United States, easing investor fears of the risk of a recession.
China’s commerce ministry said both sides are discussing the next round of talks scheduled in September and hoped U.S. officials could cancel the planned additional tariffs to avoid an escalation, boosting sentiment and driving global stocks higher.
U.S. President Donald Trump said in a Fox News radio interview that trade talks were scheduled for Thursday “at a different level,” but did not provide additional details.
Tariff-sensitive tech stocks jumped 1.60%, boosted by gains in Apple Inc and Microsoft Corp.
Chipmakers which draw a large part of their revenue from China also gained, with the Philadelphia chip index .SOX up 2.5%. Among the few losers were defensive utilities and consumer staples .SPLRCS sectors.
“Markets are trading on hopes because they (U.S., China) are going to be talking and for the time being things aren’t getting worse,” said Larry Adam, chief investment officer at Raymond James in Baltimore.
“China is giving the U.S. another chance because we have seen weaker data coming out of both sides and it is important for them to extend the olive branch.”
Top gainer among S&P 500 companies was Dollar General Corp up 9% after raising its full-year profit forecast.
European Central Bank policy maker Klaas Knot said the euro zone economy did not warrant a resumption of bond purchases, Bloomberg reported, which saw markets cut some gains but quickly regain ground a few moments after.
At 11:19 a.m. ET, the Dow Jones Industrial Average shot up 280.13 points, or 1.08%, at 26,316.23, the S&P 500 .was up 31.42 points, or 1.09%, at 2,919.36. The Nasdaq Compositewas up 110.68 points, or 1.41%, at 7,967.56.
Still, Wall Street’s main indexes are on course to record their worst monthly performance since a selloff in May, spurred by worries that tit-for-tat tariffs will drive the global economy into a recession.