US Stocks Edge Higher, Extending Gains from a Day Earlier
NEW YORK — Stocks edged higher on Wall Street in early trading Thursday, extending the market’s modest gains from a day earlier.
Technology and communication services stocks led the gainers, outweighing losses in banks and industrial companies. Bond prices rose, sending the yield on the 10-year Treasury down to 1.76% from 1.78% late Wednesday.
The latest gains came a day after the Federal Reserve cut its benchmark interest rate for a second time this year. The Fed failed to indicate whether more rate cuts were likely this year, though the central bank left the door open for additional rate cuts if the economy weakens.
The Fed is lowering interest rates in a bid to combat slowing global economic growth and uncertainty over U.S. trade conflicts, among other threats to the U.S. economy.
Washington and Beijing were set to begin trade talks Thursday ahead of more formal negotiations set for next month.
Markets have rallied this month after both sides took steps to ease tensions in advance of the talks. That’s fueled speculation among investors that the U.S. and China may at least reach an interim deal in their costly trade war.
Meanwhile, France’s finance minister said Europe is ready to impose retaliatory tariffs next year on U.S. goods as part of a long-running dispute over subsidies to plane makers Airbus and Boeing.
KEEPING SCORE: The S&P 500 index was up 0.4% as of 10:17 a.m. Eastern Time. The Dow Jones Industrial Average gained 93 points, or 0.3%, to 27,241. The Nasdaq added 0.6%.
Major stock indexes in Europe were broadly higher. Indexes in Asia were mixed.
ANOTHER RATE CUT: The Fed cut its benchmark interest rate by a quarter of a percentage point on Wednesday, in a widely expected move. The rate, which is now at a range of 1.75% to 2%, influences many consumer and business loans.
The market initially sold off on the news, however, after the Fed revealed that its panel of policymakers are divided about the upcoming path for interest rates. Stocks rebounded after Fed Chairman Jerome Powell said the central bank would be ready to take action if the economy weakened.
The Fed is trying to keep the U.S. economic expansion from being derailed by uncertainties over the U.S. trade war with China, slower global growth and a slump in American manufacturing.
The Fed’s wasn’t the only interest rate decision to be digested.
The Bank of England also kept its main interest rate on hold at 0.75% with rate-setters opting to sit tight while waiting for some clarity to emerge on Britain’s exit from the European Union. And Japan’s central bank opted to keep its own monetary policy unchanged and its key interest rate at minus 0.1%. The decision came amid signs of weaker consumer demand and exports and dimming confidence in the business outlook.
DIVIDEND BOOST: Microsoft rose 1.6% after it approved a $40 billion stock buyback and raised its quarterly dividend.
NOT SO TOUGH: U.S. Steel dropped 11.8% after it warned investors that its third quarter loss will be wider than anticipated.
ENERGY: Oil prices rose again as traders continued to assess the impact of the attack on Saudi production over the weekend. Benchmark U.S. crude was up 1% to $58.72 a barrel and is up 7.1% since the attack. Brent crude, the international standard, was up 1.6% to $64.59.
By AP reporter Alex Veiga