US stocks ride higher on trade optimism
US stocks rose on Tuesday, helped by a rebound in technology stocks after a volatile few sessions on Wall Street, amid optimism over the US-China trade dispute and some upbeat earnings reports.
All the 11 major S&P sectors were higher, with the recently-battered technology sector up 0.99%.
The trade-sensitive industrial sector rose 1.20% after President Donald Trump said he believed “a great deal” on trade can be struck with China, though he warned new tariffs were ready if a deal was not possible.
Trump’s comments came after Bloomberg reported Washington was preparing to announce tariffs on all remaining Chinese imports if talks next month between Trump and his Chinese counterpart Xi Jinping failed.
The report sparked a wild ride on Wall Street on Monday, with the Dow falling more than 900 points from its high and the S&P 500 closing within a whisker of confirming correction territory, continuing a turbulent month for equities.
“Right now the market is hungry for stability and some calming activity, which is temporarily being offered by the latest positive news on trade,” said Andre Bakhos, managing director at New Vines Capital LLC in Bernardsville, New Jersey.
Tariffs and rising costs have been among the factors that have led to a slew of disappointing forecasts from major industrials, chipmakers and other sectors, adding worries about slowing corporate growth to fears of faltering global growth.
Coca-Cola Co shares climbed 1.4% after beating quarterly sales estimates as more consumers reached for new versions of its sugar-free sodas and sparkling waters. PepsiCo Inc inched up 0.5%.
But, Pfizer Inc fell 0.9% after cutting the upper end of its fullyear revenue forecast, citing a stronger dollar and lower revenue from its sterile-injections business.
At 10:07 a.m. ET the Dow Jones Industrial Average was up 228.59 points, or 0.94%, at 24,671.51, the S&P 500 was up 27.60 points, or 1.04%, at 2,668.85 and the Nasdaq Composite was up 70.05 points, or 0.99%, at 7,120.34.
Although healthy S&P 500 results have pushed up third-quarter profit growth estimates to 25.3% from 21.8% in the past 11 days, according to Refinitiv data, concerns remain about the extent of a slowdown in earnings growth next year.
Under Armour Inc surged 20.8% after beating quarterly estimates and raising its fullyear profit forecast on higher overseas sales and lower expenses. Nike Inc rose 1.7%.
Facebook was up 0.4% ahead of its quarterly earnings report, which is due after the market closes.
US firms in China eye relocation
Advancing issues outnumbered decliners by a 2.95-to-1 ratio on the NYSE and a 2.68-to1 ratio on the Nasdaq.
The S&P index recorded three new 52-week highs and 12 new lows, while the Nasdaq recorded six new highs and 93 new lows.