Easing trade-war worries lift stocks
Global stock indexes kept climbing Thursday as investors around the world grew more optimistic that a trade dispute between the U.S. and China, the two largest economies in the world, will be resolved without too much damage. In the U.S., banks and retailers made some of the biggest gains.
The rally started late Wednesday as U.S. and Chinese officials reassured investors that they aren’t rushing into a trade war that could hurt global economic growth and company profits. That helped stocks reverse their big losses from hours earlier. On Thursday, banks rose along with interest rates, retailers and consumer-focused firms kept rising, and industrial and technology firms turned up.
On Thursday evening, however, President Trump instructed the U.S. trade representative to consider slapping $100 billion in additional tariffs on Chinese goods, and U.S. stock futures dropped.
Worries about international trade and new troubles for Facebook and Amazon have blotted out almost everything else over the last two weeks, and the market has been on a wild ride.
“Very often the reaction in the market is ‘sell first and ask questions later,’” said Quincy Krosby, chief market strategist at Prudential Financial.
Amazon led retail companies higher Thursday, rising 2.9% to $1,451.75. Netflix advanced 1.7% to $293.97. Nike rose 1.7% to $69.59.
Facebook climbed 2.7% to $159.34 after CEO Mark Zuckerbergsaid the social networking giant hasn’t lost many users in the wake of a major privacy controversy. Its stock is down 14% since the scandal became public almost three weeks ago.
Stocks tumbled Wednesday morning after the U.S. and China each announced tariffs that could take a toll on industrial companies, among others. But on Thursday, Deere rose 1.9% to $151.34, wiping out most of Wednesday’s loss. Aerospace company Boeing rose 2.7% to $336.40. Construction equipment maker Caterpillar rose 2% to $148.13.
As investors grew less worried about the trade impasse, they sold government bonds. The yield on the 10year Treasury note rose to 2.83% from 2.81%. That sent interest rates higher, which helped banks. Firms that pay big dividends lagged behind the rest of the market.
Benchmark U.S. crude rose 17 cents to $63.54 a barrel. Brent crude rose 31 cents to $68.33 a barrel. Wholesale gasoline and heating oil both remained at $1.98 a gallon. Natural gas fell 4 cents to $2.68 per 1,000 cubic feet.
Gold fell $11.70 to $1,328.50 an ounce. Silver rose 10 cents to $16.36 an ounce. Copper rose 6 cents to $3.07 a pound.
The dollar rose to 107.12 yen from 106.74 yen. The euro fell to $1.2256 from $1.2280.