NEWS OF TRADE TALKS BOOSTS STOCKS
Tech companies lead way in rally
News that the U.S. and China are open to negotiating to avert a trade war put investors in a buying mood yesterday, giving the market its best day in more than two years and erasing about half of its huge losses last week.
Technology companies accounted for much of the broad rally, which powered the Dow Jones industrial average to a gain of nearly 670 points. Microsoft was the biggest gainer in the 30-company Dow and the Standard & Poor’s 500 index, climbing nearly 8 percent.
Banks also notched solid gains, benefiting from a pickup in bond yields. Retailers, consumer goods companies and health care stocks were among the big gainers.
The market rebound followed the worst week for U.S. stocks in two years as investors traded last week’s jitters for a more optimistic outlook on trade, and an opportunity to buy.
“Certainly nothing’s settled,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “Investors are still viewing this as a glasshalf-full market and a constructive economy, so it’s not surprising to see them buy on value here, buy on dips to try to rebuild their positions.”
The Standard & Poor’s 500 index rose 70.29 points, or 2.7 percent, to 2,658.55. The Dow Jones industrial average gained 669.40 points, or 2.8 percent, to 24,202.60. The Dow lost more than 1,400 points last week and is still down slightly for the year.
The Nasdaq added 227.88 points, or 3.3 percent, to 7,220.54. The Russell 2000 index of smaller-company stocks picked up 33.63 points, or 2.2 percent, to 1,543.72.
All told, the Dow, S&P 500 and Nasdaq posted their best one-day gains since August 2015, making up slightly more than half of the market’s losses on Thursday and Friday.
Global stock markets fell sharply last week amid fears of a trade war after President Trump announced duties on $60 billion worth of Chinese goods in a dispute over technology policy. On Friday, Beijing released a $3 billion list of U.S. goods targeted for possible retaliation over an earlier U.S. tariff hike on steel and aluminum imports. That prompted fears the spat might depress trade worldwide and set back the global economic recovery.
Those fears eased yesterday, after China’s government said it is open to negotiating with Washington. That announcement followed a news report indicating that U.S. officials have submitted a list of market-opening requests.
A foreign ministry spokeswoman, Hua Chunying, didn’t confirm the report by The Wall Street Journal but said at a regular briefing, “Our door for dialogue and discussion is always open.”