Sunday, 17 November, 2019

Markets Right Now: Stocks are mixed after early gain fades

Dow rises 350 points after China says it wants trade talks Markets Right Now: Stocks are mixed after early gain fades
Ginger Lawrence | 02 September, 2019, 17:04

USA stocks index futures rose on Friday, as investors took comfort from signals that the United States and China will resume trade talks.

As of 1530 BST, the Dow Jones Industrial Average was up 0.41% at 26,471.31, while the S&P 500 was 0.37% ahead at 2,935.39 and the Nasdaq Composite came out of the gate 0.13% firmer at 7,983.86. The technology-heavy Nasdaq Composite rose 116.51 points, or 1.5%, to 7973.39. The closely watched spread between the 10-year Treasury yield and the 2-year rate is trading around its lowest level since 2007.

"China and trade continue to be a wild card", said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

Dollar General Corp was the best performer among S&P 500 companies, rising 10.68 per cent on an upbeat full-year profit forecast. Ulta Beauty plunged 25% after reporting weak results and cutting its estimates.

A spokesman for China's Commerce Ministry said Thursday that the USA and China remain in communication over possible talks in September and added that Beijing hopes to prioritize discussions about removing the latest tariffs announced by President Trump to prevent a further escalation of the trade war. Meanwhile, shares of chip makers including Nvidia, Micron Technology and Applied Materials - which have been caught in the crosshairs of the trade battle - added at least 3% apiece.

Stocks climbed broadly on Wall Street in early trading Friday as the market extended a recent rally and closed in on a big weekly gain after four straight weeks of losses.

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"The market believes that there will be some type of negotiation, but there is real danger this trade conflict is going to last, especially with the magnitude of September tariffs", added Brown. Elsewhere in commodities trading, Crude oil for delivery in October fell 2.73% or 1.55 to hit $55.16 a barrel, while the November Brent oil contract fell 2.33% or 1.41 to trade at $59.08 a barrel.

The Trump administration on Wednesday made official its additional 5 per cent tariff on $300 billion in Chinese imports and set collection dates of September 1 and December 15, prompting several hundreds of United States companies to warn of price hikes.

China's commerce ministry said both sides are discussing the next round of talks scheduled for September, but progress would be determined by whether Washington could create favorable conditions. In addition, higher tariffs on a separate group of Chinese products are to take effect October 1.

The biggest gainer on the benchmark index was Campbell Soup Co (CPB.N), which jumped 8.7% after its quarterly profit beat estimates.

USA financial markets were due to stay closed on Monday for the Labor Day holiday and a new round of US tariffs on some Chinese goods were expected to come into effect on Sunday.