Stocks climb as mar­kets cap tur­bu­lent quar­ter with calm end

The Saline Courier - - BUSINESS - As­so­ci­ated Press

NEW YORK — U.S. stocks climbed on

Mon­day and gave one last nudge to en­sure the S&P 500 emerged from yet an­other tu­mul­tuous quar­ter with a mod­est gain.

As has been the case through­out the quar­ter, move­ments in Pres­i­dent Don­ald Trump’s trade war with China helped drive the mar­ket on Mon­day. In­vestors found en­cour­age­ment af­ter China said that its top trade ne­go­tia­tor will lead talks with the United States that are ex­pected to take place next week. The Trump ad­min­is­tra­tion also calmed some wor­ries that it may limit U.S. in­vest­ment in Chi­nese com­pa­nies.

The de­vel­op­ments helped push tech­nol­ogy stocks higher in par­tic­u­lar. Those com­pa­nies of­ten move along with news about trade be­cause of how re­liant they are on China as both a cus­tomer and a sup­plier. The S&P 500 climbed 14.95 points, or 0.5%, to 2,976.74.

The Dow Jones In­dus­trial Av­er­age rose 96.58, or 0.4%, to 26,916.83, and the Nas­daq com­pos­ite added 59.71, or 0.8%, to 7,999.34.

The moves left the S&P 500 with a 1.2% gain for the quar­ter. While that was its small­est quar­terly gain this year, the in­dex had been on track for a much worse per­for­mance just a month ago.

Trump shocked mar­kets in Au­gust when he said he’d raise tar­iffs on Chi­nese goods, and the an­nounce­ment sent stocks and bond yields reel­ing. The S&P 500 dropped more than 6% in the weeks fol­low­ing July 26, when it set its last record. But stocks be­gan climb­ing again in Septem­ber as both sides made con­cil­ia­tory moves to ease ten­sions.

Yields, mean­while, re­mained lower for the quar­ter af­ter the Fed­eral Re­serve cut short-term rates twice. They were the first rate cuts for the Fed since the fi­nan­cial cri­sis was swamp­ing the econ­omy in 2008. Across the At­lantic, the Euro­pean Cen­tral Bank was like­wise work­ing to keep rates low in hopes of shoring up a slow­ing global econ­omy.

The yield on the 10-year Trea­sury dipped to 1.65% from 1.67% late Fri­day. At the end of the last quar­ter, it was at 2%.

Like the S&P 500, the Dow also ended the quar­ter with a gain of 1.2%.

The tech­nol­ogy-heavy Nas­daq was a touch lower, with a loss of 0.1%.

Small com­pa­nies took on more dam­age, as they typ­i­cally do when in­vestors are wor­ried about the threat of a re­ces­sion. The Rus­sell 2000 lost 2.8% dur­ing the quar­ter.

Don’t ex­pect the tu­mult to end with the close of the quar­ter.

Aside from the U.s.china talks, the next three months have plenty of events on the sched­ule to keep mar­kets on edge. Be­yond the United King­dom’s pend­ing exit from the Euro­pean Union, in­vestors are also wait­ing to see whether Ger­many will en­ter a re­ces­sion and how the new in­com­ing head of the Euro­pean Cen­tral Bank per­forms.

Closer to home, the im­peach­ment in­quiry into Trump could cre­ate even more uncer­tainty. That puts more pres­sure on the con­sumer, the bul­wark of the U.S. econ­omy re­cently, par­tic­u­larly when busi­nesses have be­come re­luc­tant to spend due to the trade war.

“The con­sumer’s been enough to keep the econ­omy mov­ing, but things like con­sumer con­fi­dence seem to be plateau­ing,” said Emily Roland, cochief in­vest­ment strate­gist at John Han­cock In­vest­ment Management.

In the next few weeks, com­pa­nies are sched­uled to tell in­vestors how much profit they made dur­ing the third quar­ter. Ex­pec­ta­tions are gen­er­ally low again, with an­a­lysts fore­cast­ing a drop of nearly 4% from a year ago. The re­sults, plus what CEOS say about their spend­ing and rev­enue fore­casts, should give a bet­ter pic­ture of the econ­omy’s po­ten­tial di­rec­tion.

“We need that earn­ings en­gine to kick in to drive mar­kets higher,” Roland said.

Last year, the S&P 500 slumped 14% in the fourth quar­ter for its worst per­for­mance in seven years when fear spiked that the Fed­eral Re­serve’s plans to keep rais­ing in­ter­est rates and a slow­ing global econ­omy would knock the United States into a re­ces­sion.

This time around, the Fed­eral Re­serve has shifted gears, and many in­vestors ex­pect the cen­tral bank to cut rates at least one more time this year. That could help sup­port mar­kets, even with all the po­ten­tial flash­points on the cal­en­dar.

Bench­mark U.S. crude fell $1.84 to set­tle at

$54.07 per bar­rel Mon­day. Brent crude, the in­ter­na­tional stan­dard, fell $1.13 to $60.78 a bar­rel.

Nat­u­ral gas dropped 7 cents to $2.33 per 1,000 cu­bic feet, heat­ing oil lost 4 cents to $1.91 per gal­lon and whole­sale gaso­line fell 5 cents to $1.60 per gal­lon.

Gold fell $33.40 to $1,465.70 per ounce, sil­ver fell 65 cents to $16.90 per ounce and cop­per fell 2 cents to $2.56 per pound.

Stock mar­kets around the world were mixed dur­ing the quar­ter, as Euro­pean growth re­mained stub­bornly weak and Hong Kong saw in­creas­ingly vi­o­lent po­lit­i­cal protests. In Europe, France’s CAC 40 fin­ished with a 2.5% gain for the quar­ter. Ger­many’s DAX rose 0.2%, and the FTSE 100 lost 0.2%.

In Asia, Ja­pan’s Nikkei 225 in­dex rose 2.3% for the quar­ter, while South Korea’s Kospi fell 3.2% and the Hang Seng in Hong Kong lost 8.6%.

The dol­lar rose to

108.07 Ja­panese yen from 107.81 yen on Fri­day. The euro weak­ened to $1.0902 from $1.0941.

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