Northwest Arkansas Democrat-Gazette
China-trade optimism rallies stocks
S&P 500 adds to winning streak as Dow ends 4 days of losses
U.S. stocks finished broadly higher Tuesday as investors grew more optimistic about the prospects for a resolution to the costly trade dispute between the U.S. and China.
Technology, financial and health care stocks powered much of the rally, which gave the benchmark S&P 500 index its biggest gain this month and a threeday winning streak.
The S&P 500 gained 34.93 points, or 1.3 percent, to 2,744.73. The Dow Jones industrial average climbed 372.65 points, or 1.5 percent, to 25,425.76, ending the average’s four-day run of losses. The index was briefly up by 405 points.
The Nasdaq composite rose 106.71 points, or 1.5 percent, to 7,414.62. The Russell 2000 index of smaller-comThe
pany stocks, which has been leading the other indexes this year, added 19.25 points, or 1.3 percent, to 1,538.23.
President Donald Trump said Tuesday that he might let a March 1 deadline pass in trade talks with China if the two countries get close to a deal. Trump said he’s not inclined to extend the deadline but might let it “slide for a little while” if talks go well. Earlier, the White House had called the date a “hard deadline.”
Both nations are trying to reach a deal before midnight on March 1. The additional tariffs are set to kick in at 12:01 a.m. March 2.
“Any deal would help alleviate some of the uncertainty,” said Karyn Cavanaugh, senior markets strategist at Voya Investment Management.
“The GDP hasn’t been dinged that much from the trade tariffs, it’s really been the uncertainty. It’s spilling over into business plans and that’s a hurdle for growth.”
European markets finished higher.
Stocks got an early boost Tuesday after lawmakers in Washington reached a tentative deal to avoid another partial government shutdown. The agreement on border security involves far less money for a wall than the White House wanted, and it’s not clear whether Trump will support the deal.
Still, the move alleviated some uncertainty for the market as the U.S. and China continue trade negotiations, which resumed Monday.
Fears of a global slowdown still linger. Europe and China have both reported slower growth. Those concerns have dimmed the outlook for corporate earnings growth this year.
The latest company earnings season has featured solid profit growth for the final three months of 2018, but caution about conditions going forward. Analysts predict profits will fall in the current quarter, according to FactSet.
“Overall earnings are good, but we’re looking for a bit of a slowdown in the first quarter because we have a high bar to hurdle over,” Cavanaugh said.
Investors continued to size up the latest batch of corporate earnings Tuesday.
Under Armour climbed 6.9 percent after the maker of sportswear beat Wall Street forecasts. A surge in international sales offset a downturn in Under Armour’s U.S. sales.
Molson Coors plunged 9.4 percent as lower sales volume sunk revenue and profit during the fourth quarter. The brewer also will restate some past results. The maker of Molson and Coors beer said tax accounting errors in 2016 and 2017 prompted the restatements.
Technology stocks helped power the market’s gains Tuesday. Micron Technology climbed 4.7 percent. Financial companies also notched big gains. Brighthouse Financial surged 13.9 percent.
Bond prices fell. The yield on the 10-year Treasury rose to 2.68 percent from 2.66 percent late Monday.
The dollar rose to 110.52 yen from 110.40 yen on Monday. The euro strengthened to $1.1331 from $1.1276.
Gold added 0.2 percent to $1,314 an ounce. Silver was little changed at $15.69 an ounce. Copper dropped 0.6 percent to $2.77 a pound.