Walmart, China power Dow’s 396-point surge

NEW YORK – The Dow notched its biggest point gain since April as investors welcomed strong sales from retail giant Walmart and news that the U.S. and China are preparing to resume stalled trade talks.

The Dow Jones industrial average closed up 396 points, or 1.6 percent, to 25,559 on Thursday. For the year, it has risen 3.4 percent.

Wall Street pros cited a possible thaw in the ongoing trade war between the world’s two largest economies for lifting the mood of the market, which has stalled recently due to fears that the tit-for-tat tariff skirmish between China and the U.S. would harm the global economy. Worries about Turkey’s financial crisis spreading to other countries has also hurt stocks.

“It shows that the market is being held back by trade concerns and if

those were to be alleviated, the strong economic data and strong corporate profits could lift the U.S. stock market to all-time highs,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina.

Also boosting sentiment was a fresh signal from Walmart that U.S. shoppers were confident and in a spending mood. The company’s online sales jumped

40 percent, and its overall sales rose at the fastest rate in more than a decade in its latest quarter. The stock jumped 9.3 percent to $98.64.

The broad Standard & Poor’s 500 stock index gained 0.8 percent to 2,841, leaving it within 1 percent of its Jan. 26 record close of 2872.87.

Thursday’s big gains came as the bull market for the broad U.S. stock index looks set on Wednesday to eclipse the 1990s bull as the longest in history. The recent rise in stock prices has been driven by a reacceleration in economic expansion in the U.S., with last quarter’s growth of 4.1 percent marking the fastest pace since 2014. Since the market low on March 9,

2009, the S&P 500 has gained 320 percent. A $10,000 investment in the large-company stock index at the start of the bull would now be worth $42,000.

Stocks slumped Friday and Monday as investors worried about Turkey’s currency crisis and its ability to pay off debt with its weakened lira. They then rebounded Tuesday only to fall again Wednesday on rising concerns about China’s economic growth.

The U.S. stock market, boosted by another strong quarterly earnings season, continues to fare better than others around the globe.

A big reason for the broad market’s gain this year has been a sharp rise in corporate profitability, which has gotten a boost from lower tax rates. Secondquarter profit growth for S&P 500 companies is tracking at 24.6 percent, with nearly eight of the 10 of the

463 companies that have reported results topping forecasts, earnings-tracker Thomson Reuters says.

Thursday, Wall Street cheered news that China will send a trade envoy to Washington in late August in a new attempt to end the trade dispute. The countries are in conflict over technology policy and China’s trade surplus with the U.S.

The two sides haven’t held talks since early June. After those talks, both countries slapped tariffs on billions worth of each other’s imports. And import levies are set to rise again next week, as both countries have threatened larger increases.

Up until now, the U.S. economy and stock market have been able to shrug off the trade war headwinds.

“It’s clear that trade is not having as big a negative impact as investors had previously feared,” says Alec Young, managing director of global markets research at FTSE Russell.