The Morning Journal (Lorain, OH)
Stocks bounce back as tech, retail, banks jump
NEW YORK >> Global stocks rose Monday after taking big losses last week. Major technology companies recovered some of their recent losses and retailers and travel companies climbed on the first full trading day of the holiday shopping season.
Major indexes in the U.S., Europe and Asia all climbed. London’s main stock index jumped after the British government and the European Union agreed to terms governing Britain’s departure from the EU in March. It’s not clear if Parliament will approve the deal.
Stocks have been in a steep downturn since early October, but that slump has included some substantial rallies. Banks rose Monday as interest rates turned higher after a two-week slide. The first full trading day of the holiday shopping period was a strong one for companies that sell goods and services to consumers. Amazon surged 5 percent and Tiffany rose almost 4 percent.
On Friday the benchmark S&P 500 index closed 10.2 percent beneath the record high it had set in late September. That’s the second time this year the index has dropped 10 percent from a recent peak, a mark known on Wall Street as a “correction.” The techheavy Nasdaq composite and the smaller, more U.S.-focused Russell 2000 have suffered even worse downturns dating to late August.
Stocks have skidded recently as investors have grown doubtful that the U.S. and China will resolve their differences over technology policy and other issues. Their fears could be confirmed or upended in a few days, as U.S. President Donald Trump and Chinese President Xi Jinping are scheduled to discuss their trade dispute at the Group of 20 summit meeting in Buenos Aires, Argentina at the end of this week.
“A fair amount of trade escalation between the U.S. and China is being priced in by the market,” said Justin Waring, a strategist at UBS Global Wealth Management’s Chief Investment Office. “Any kind of statement that there will be a formal trade negotiation round following that meeting would be viewed as positive.”
The U.S. is scheduled to raise import taxes on $200 billion in Chinese imports on Jan. 1, and investors are worried China will retaliate. Even if those tariffs do take effect, Waring said stocks could still gain as long as countries say they will hold off on further tariff increases while they negotiate.
The S&P 500 climbed 40.89 points, or 1.6 percent, to 2,673.45. The Dow Jones Industrial Average gained 354.29 points, or 1.5 percent, to 24,640.24.
The Nasdaq rose 142.87 points, or 2.1 percent, to 7,081.85.
The Russell 2000 index of smaller-company stocks added 17.28 points, or 1.2 percent, to 1,505.96.