US stocks up as tech recovers more ground
Crude oil prices weaken; dollar down versus yen
NEW YORK, Sept 15, (AP): Wall Street is strengthening again on Tuesday as big technology stocks wrest back more of their losses from their sudden belly flop earlier this month.
The S&P 500 was 0.8% higher in morning trading and back within 5% of its record set on Sept 2. It’s on pace for a second day of solid gains, on the heels of its worst week since June after the superstar tech stocks driving the market abruptly lost momentum.
The Dow Jones Industrial Average climbed 148 points, or 0.5%, to 28,141, as of 10:52 am Eastern time. The Nasdaq was up 1%. Stocks in Europe and much of Asia also ticked higher following encouraging economic reports from around the world. In China, retail sales were higher last month than a year earlier for the first such growth this year, after the pandemic pancaked the world’s second-largest economy. In Europe’s largest economy, a reading on German economic confidence rose more than expected.
In the United States, a report showed that industrial production also strengthened last month. But the growth wasn’t as strong as economists were expecting. Other reports showed that manufacturing in the New York state is expanding more than economists expected, as are import and export prices. Treasury yields were holding relatively steady after giving up some of their earlier gains following the release of the report on industrial production. The yield on the 10-year Treasury was at 0.68%, up from 0.67% late Monday. The 30-year yield ticked up to 1.42% from 1.41%.
Shorter-term rates remain pinned at lower levels on expectations that the Federal Reserve will keep its benchmark rate at nearly zero for some time to help the economy recover. The central bank is beginning its latest meeting on interestrate policy Tuesday, and it will announce its decision on Wednesday. Economists say it could change some of the language around its existing pledge to buy bonds to support markets, but they expect no major news. Big Tech stocks continued their recovery this week, with Apple up 0.8%, Microsoft up 1.1% and Amazon
up 0.6%. Such stocks soared through much of the pandemic on expectations that their profits will boom as even more of daily life shifts online. But they suddenly lost altitude earlier this month amid worries that their prices had simply climbed too high, even after taking into account their tremendous growth.
Because these companies have grown so massive, their movements alone dictate the market’s performance more than ever. Tech stocks as a group account for nearly 28% of the S&P 500, and they’re up 1.1% this week after slumping more than 4% in each of the prior two weeks.
Nvidia rose another 0.5% after jumping 5.8% Monday.
In European stock markets, Germany’s DAX returned 0.2%, and the French CAC 40 rose 0.4%. The FTSE
100 in London climbed 1.1%.
Asian stock markets were mostly higher Tuesday after Wall Street rose on a flurry of corporate deals and China’s economic activity improved. Shanghai, Hong Kong and Seoul gained, while Tokyo retreated.
The Shanghai Composite Index gained 0.3% to 3,289.38 after the government reported retail sales rose 0.5% in August over a year earlier for their first positive growth this year. The Chinese statistics agency said that was a sign of “stable and continuous” recovery from the economy’s downturn.
The Nikkei 225 in Tokyo lost 0.4% to 23,464.99 while the Hang Seng in Hong Kong added 0.5% to 24,750.45. The S&P-ASX 200 in Sydney was down less than 0.1% at 5,894.50.
India’s Sensex opened up 0.1% at 38,800.66. New Zealand, Singapore and Bangkok gained while Jakarta retreated.
On Wall Street, tech stocks gained after Nvidia agreed to buy Softbank’s stake in chipmaker Arm for $40 billion.
Oracle climbed 4.3% after the software maker beat out Microsoft to become the “trusted technology provider” of Chinese-owned video app TikTok. The agreement still requires approval from the Trump administration, which deemed TikTok a security risk and demanded its sale to a US owner.
In other deals, Gilead agreed to buy Immunomedics for $21 billion. Verizon purchased Tracfone for US$6.25 billion and Alibaba invested $4 billion in Grab.
This week’s strong start is a reversal after a slide in high-flying tech stocks
that many analysts said was overdue.
AstraZeneca added 0.5% following the weekend announcement that clinical trials for its coronavirus vaccine will resume after a reported side-effect in a British patient. The vaccine is seen as one of the strongest contenders among the dozens of vaccines being tested.
In energy markets, benchmark US crude oil for October delivery lost 5 cents to $37.21 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell 7 cents on Monday to $32.26. Brent crude oil for November delivery lost 8 cents to $39.53 per barrel in London. The contract dropped 22 cents in the previous session, to $39.61.
The dollar declined to 105.64 yen from Monday’s 105.72 yen. The euro rose to $1.1890 from $1.1865.