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What trade fears? Wall Street is back in rally mode

Stock MarketsSep 05, 2019 04:22PM ET
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© Reuters. Traders work on the floor at the NYSE in New York

By Noel Randewich

(Reuters) - U.S. stocks surged on Thursday on expectations of a de-escalation in trade tensions after Washington and Beijing agreed to hold high-level talks next month, while strong U.S. economic data eased fears of a domestic slowdown.

After anxiety about a deepening trade war triggered a sell-off in late July and early August, leading to speculation that a decade-long bull market was ending, the S&P 500 has largely recovered and is now less than 2% short of its July 26 record high close. The benchmark index has climbed 2.4% in the past two sessions.

China and the United States agreed to hold talks in early October in Washington, boosting markets as investors bet on a thaw in the trade war between the world's two largest economies, which has taken a toll on global growth.

Alternating signs of improvement and deterioration in the U.S.-China trade war, often based on tweets and comments from Trump, have repeatedly sparked volatility on Wall Street in recent months.

"Whether the talks occur or not, we'll see. And whether they are productive, we're skeptical. But the market loves it," said Tim Ghriskey, chief investment strategist at Inverness Counsel in New York.

The S&P information technology index (SPLRCT) rose 2.1%, while financials (SPSY) jumped 1.9%, the two rising the most among the 11 major S&P 500 sectors.

The interest rate-sensitive S&P 500 Banks Index <.SPXBK> surged 2.5%, following a rise in U.S. Treasury yields. [US/]

The ADP (NASDAQ:ADP) National Employment Report, considered a precursor to the Labor Department's more comprehensive jobs report, showed U.S. private employers' payrolls grew at the fastest pace in four months in August, led by big gains in service-sector jobs.

Another private survey showed growth in U.S. services sectors accelerated in August, rebounding from its weakest level in nearly three years, as new orders rose to their highest level since February amid trade worries.

The upbeat reports eased concerns of an economic downturn, which was exacerbated by data on Tuesday that showed a contraction in U.S. factory activity in August. Investors will keep a close watch on the crucial nonfarm payrolls data due on Friday.

"Manufacturing is in a bit of a global slump, but if you look at the other economic data, like the services and jobs reports, none of them point to an economy that is teetering on a recession," said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.

The Dow Jones Industrial Average (DJI) jumped 1.41% to end at 26,728.15 points, while the S&P 500 (SPX) gained 1.30% to 2,975.97.

The Nasdaq Composite (IXIC) surged 1.75% to 8,116.83.

(Graphic: Markets indices - https://fingfx.thomsonreuters.com/gfx/buzzifr/14/5719/5719/Capturemarkets.png)

Sectors viewed as defensive declined, with the S&P utilities index (SPLRCU), real estate index <.SPLRCR> and consumer staples index (SPLRCS) all down.

Advancing issues outnumbered declining ones on the NYSE by a 1.93-to-1 ratio; on Nasdaq, a 2.84-to-1 ratio favored advancers.

The S&P 500 posted 56 new 52-week highs and no new lows; the Nasdaq Composite recorded 74 new highs and 45 new lows.

About 7.5 billion shares changed hands on U.S. exchanges, compared with the 6.8 billion-share daily average over the last 20 sessions.

What trade fears? Wall Street is back in rally mode
 

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Will Kaywood
Will Kaywood Sep 05, 2019 6:26PM ET
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the market just doesnt get it. it doesnt get that the phone call at night was fake. it doesnt get that china calls trumps bluffs. it doesnt get that china is eating America's lunch in this trade war. this monetary system cant given forever. the dollar is going to fall off a cliff and it's up to each person to have his portfolio in order before that happens.
Will Kaywood
Will Kaywood Sep 05, 2019 6:26PM ET
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*go on*, not "given"
Mart Bab
Rubberduck1973 Sep 05, 2019 5:54PM ET
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Investors can only remenber what happend the last 24 hours. Or. Talking market up so majors can close and take profit, were they forgot the last time DT tweeted.
Anthony Maestas
Anthony Maestas Sep 05, 2019 2:21PM ET
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We have a president that breaks federal law via sharpie and believes that windmills give you cancer. I think it'd be a fairly safe bet to buy more gold and sell off few more shares while the gettin's still good.
Ng Zen ng
Ng Zen ng Sep 05, 2019 12:14PM ET
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Hmm.... still way behind shanghai... comparing last 1-2 mths. Still barely recovered. While shanghai tech stocks ald spur
Happy Life
Happy Life Sep 05, 2019 12:09PM ET
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who writes these articles? how has the economic data changed within 24 hours?
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Cornel Pod
Cornel Pod Sep 05, 2019 12:09PM ET
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articles are part of a narrative while charts are based on real money. I trust charts only
nick bryson
nick bryson Sep 05, 2019 12:09PM ET
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and what do the charts say? my research doesn't show a positive market but I'm wrong apparently
Stacey Beam
Stacey Beam Sep 05, 2019 12:09PM ET
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I'm still trying to reconcile increased job loss with labor gains. The numbers are silly. There was no basis for the overnight massive ramp. The big boys are simply suckering in retail then it will drop again.
Victor Pati
Victor Pati Sep 05, 2019 12:09PM ET
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interesting move, reports everywhere but numbers dont matches
Stacey Beam
Stacey Beam Sep 05, 2019 12:09PM ET
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The futures moved massively overnight on a pushed back meeting with China. Data doesn't matter.
jason lin
jason lin Sep 05, 2019 8:44AM ET
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Yeah right, give me a break.
Philip Sorrells
Philip Sorrells Sep 05, 2019 8:05AM ET
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Fake trump trade war
 
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