Optimism over trade talks lifts markets
Stocks finished broadly higher Wednesday as investors remained optimistic that the U.S. and China will make more progress in resolving their costly trade dispute.
Energy companies, retailers and industrial stocks accounted for much of the broad gains as the market extended its winning streak to a fourth day.
Key officials from the world’s two largest economies will meet Thursday and Friday to try and stave off an escalation of a trade conflict that has hurt companies and consumers by raising prices on a number of products. President Donald Trump has said he might let a March 2 deadline slide if the U.S. and China get close to a deal.
After March 2, additional tariffs are scheduled to kick in, making the situation worse. Economists and analysts are optimistic that both sides will eventually hammer out an agreement that satisfies U.S. complaints that China steals or pressures U.S. companies to hand over technology.
“The president’s seemingly positive tone regarding trade has helped underpin the market, particularly the industrial names,” said Quincy Krosby, chief market strategist at Prudential Financial. “That’s a positive catalyst for the market.”
The S&P 500 index gained 8.30 points, or 0.3 percent, to 2,753.03. The Dow Jones Industrial Average climbed 117.51 points, or 0.5 percent, to 25,543.27. The Nasdaq composite added 5.76 points, or 0.1 percent, to 7,420.38. The Russell 2000 index of smaller-company stocks, which has been leading the other indexes this year, added 4.71 points, or 0.3 percent, to 1,542.94.
Major indexes in Europe also finished broadly higher, despite a report of slumping industrial output across the 19 countries that use the euro.
Companies on both sides of the U.S.-China dispute have been battered by Washington’s tariffs and retaliatory duties imposed by Beijing. The stakes are rising as global economic growth cools, which has contributed to a dimmer outlook for company earnings this year.
Still, the White House’s remarks about the trade talks this week have helped alleviate some uncertainty for the market.
“The momentum that we saw yesterday has certainly carried through today,” said Erik Davidson, chief investment officer at Wells Fargo Private Bank.