Stocks Rise as US, China Ease Trade Tensions
NEW YORK (AP) — U.S. stocks rose in early trading after the U.S. and China took more steps to ease tensions in their long-standing trade war that threatens to hurt the broader global economy.
Technology stocks led the gains for a second day and helped extend Wednesday’s rally. Tech companies, particularly chipmakers, are heavily impacted by the trade war because many of them make products in China or rely on Chinese suppliers.
Microsoft, the most valuable company in the S&P 500 index, rose 1%, while PayPal gained 2.8%.
Consumer-focused stocks also had solid gains. McDonald’s rose 1.2%.
Health care stocks also helped power a rally for the second day. Medical device maker Abbott gained 1.3%.
Energy companies tumbled as oil prices slid 2%. Oilfield services company Schlumberger shed 2.4%.
The yield on the 10-year Treasury rose to 1.74% from 1.73% a day earlier.
The U.S. has agreed to delay another round of tariffs on Chinese imports by two weeks to Oct. 15. President Donald Trump said on Twitter that the delay is a “a gesture of good will.” Chinese importers then asked U.S. suppliers for prices for soybeans, pork and other farm goods.
The latest gestures follow China’s move early Wednesday to exempt 16 categories of American products from planned tariff increases. Wall Street has welcomed the series of measures. Investors are hoping that both sides can make progress on a resolution to the dispute when they meet next month for another round of negotiations.
KEEPING SCORE: The S&P 500 index rose 0.4% as of 10:10 a.m. Eastern time. The Dow Jones Industrial Average rose 132 points, or 0.5%, to 27,219. The Nasdaq rose 0.8%.
OVERSEAS: Stocks in Europe initially rose, but then fell broadly following the European Central Bank’s latest round of economic stimulus. The central bank cut the rate on deposits it takes from banks and said it will start buying bonds, which will help pump money into the financial system and lower borrowing costs. The rate cut was widely expected as the European Union faces an uncertain future with Britain’s likely chaotic exit on Oct. 31. European nations are also facing a broad economic slowdown as the impact of the U.S.-China trade war reverberates globally.
Stocks moved higher in Asia.
SHORT HEM: Tailored Brands plunged 25.8% after giving investors a dismal third quarter profit forecast and halting its dividend. The company also expects a decline in sales, including at its struggling Men’s Wearhouse stores and Jos. A Bank locations.
CEO SURPRISE: DXC Technology fell 13.4% after the information technology company said CEO Mike Lawrie retired and is being replaced by Mike Salvino, a current board member at DXC and former managing director at a tech sector focused investment firm.