Stocks March Up on China Hope 08/16 15:56
U.S. stocks jumped Thursday as China and the U.S. said they will hold their
first trade discussions in months, a potential sign of progress toward ending
their trade war.
NEW YORK (AP) -- U.S. stocks jumped Thursday as China and the U.S. said they
will hold their first trade discussions in months, a potential sign of progress
toward ending their trade war.
China will send a trade envoy to Washington later this month in a new
attempt to end the trade dispute before it causes major damage to the global
economy. The two sides haven't talked since early June. Energy and metals
prices and shares of industrial companies turned higher.
Walmart soared after reporting its strongest growth in sales in more than a
decade. Other companies that make and sell basic necessities also rose.
Jason Draho, the head of asset allocation for UBS, said investors are eager
for the two countries to start making progress and resolve their differences.
He added that China may be changing course because its economy has slowed.
"The data we've seen from China recently has showed slowing growth," he
said. "It's possible they decided 'OK, we need to take a different approach'
and come to the table offering a little more."
The S&P 500 index climbed 22.32 points, or 0.8 percent, to 2,840.69. The Dow
Jones Industrial Average jumped 396.32 points, or 1.6 percent, to 25,558.73 as
Walmart and Boeing made big gains. The Nasdaq composite rose 32.41 points, or
0.4 percent, to 7,806.52.
The Russell 2000 index of smaller-company stocks added 15.09 points, or 0.9
percent to 1,685.75.
China and the U.S. have been in conflict for months over issues including
Beijing's technology policy and its trade surplus with the U.S. After the
latest round of talks failed to produce much progress, both countries put taxes
on $34 billion in each other's imports.
Those tariffs are set to rise next week, and both countries have threatened
even larger increases as early as September.
Walmart posted its biggest gain in more than a decade in sales at stores
open at least a year, and its online revenue grew 40 percent, a faster pace
than it reported in the first quarter. The stock jumped 9.3 percent to $98.64,
which wiped out its losses from earlier this year.
Other retailers and consumer goods companies also edged higher. Target added
1.7 percent to $82.07 and Procter & Gamble rose 1.7 percent to $83.69 while
McDonald's climbed 1.2 percent to $161.73.
Banks rallied as interest rates increased. Bond prices turned lower again.
The yield on the 10-year Treasury note rose to 2.87 percent from 2.85 percent.
Oil prices were steady after a sharp drop a day earlier. U.S. crude inched
up 0.7 percent to settle at $65.46 a barrel in New York. Brent crude, the
standard for international oil prices, picked up 0.9 percent to $71.43 per
Metals prices also turned higher. Gold dipped 0.1 percent to $1,184 an
ounce. Silver rose 1.8 percent to $14.71 an ounce. Copper added 2.2 percent to
$2.62 a pound. That made up for much of Wednesday's loss, but copper prices are
still down 20 percent since early June.
Stocks have swung wildly over the last week. Thursday marked the Dow's
largest gain since April. The day before that, stocks took their biggest loss
in six weeks.
Global markets slumped Friday and Monday as investors worried about Turkey's
currency crisis, then rebounded Tuesday only to fall again Wednesday on rising
concerns about China's economic growth.
J.C. Penney tumbled 27 percent to $1.76 after it took a bigger loss than
analysts expected and reported weaker sales. The chain also cut its forecasts
for the year again. Dillard's dropped 8.7 percent to $75.80 after its report.
Other than Penney, most department store stocks have jumped this year. They
dropped Wednesday after Macy's said its sales growth slowed during the second
Macy's inched up 1.9 percent to $35.81 after a 16 percent plunge the day
before. Nordstrom and Kohl's also managed small gains.
Symantec rose 4.6 percent to $19.41 after the activist investment firm
Starboard Value disclosed an investment in the company and said it plans to
nominate five directors for spots on Symantec's board of directors.
Symantec said it has been talking to Starboard for the past several weeks
and is evaluating the candidates it nominated.
Chipotle lost 4.4 percent to $502.70 after Ohio heath officials said tests
from a Chipotle location came back positive for an illness that occurs when
food is left at unsafe temperatures.
Teva Pharmaceutical Industries jumped 7.3 percent to $24.11 after U.S.
health officials approved its generic version of EpiPen, the emergency allergy
medication made by Mylan. The injections are stocked by schools and parents to
treat allergic reactions to food and bug bites.
The dollar rose to 110.88 yen from 110.57 yen. The euro rose to $1.1365 from
Germany's DAX added 0.6 percent and in France the CAC 40 rose 0.8 percent.
Britain's FTSE 100 rallied 0.8 percent.
Japan's Nikkei 225 index fell 0.1 percent and the Hang Seng in Hong Kong
lost 0.8 percent. South Korea's Kospi reopened from a holiday and tumbled 0.8