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Stocks - Huge Wall Street Rally Greets Tariff Delay

Stock MarketsAug 14, 2019 03:33AM ET
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Investing.com - A Trump Administration decision to delay the imposition of tariffs on goods imported from China set off a huge rally Tuesday that reclaimed most of Monday's losses.

The Administration delayed the imposition of tariffs on some goods until Dec. 15, which should give retailers plenty of time to stock their shelves.

"We're doing this for the Christmas season," President Donald Trump told reporters

The rally sent the S&P 500 up 1.48%, the Dow Jones industrials up 1.44% and the Nasdaq Composite up nearly 2%.

The gains for the S&P 500 and the Nasdaq -- 42.57 points and 153 points, respectively -- recovered all of Monday's losses. The Dow, which gained about 373 points, ended the day about 7.5 points short of a total recovery from its 380-point loss on Monday.

The Nasdaq 100 index, which has a concentration in big tech, jumped more than 2.2%. The index more than recovered its Monday loss, ending the day 82 points ahead of Friday's close.

Apple (NASDAQ:AAPL), electronics retailer Best Buy (NYSE:BBY), Nike (NYSE:NKE), Microsoft (NASDAQ:MSFT) Intel (NASDAQ:INTC), Cisco Systems (NASDAQ:CSCO) and Caterpillar (NYSE:CAT) were among the biggest winners from the decision.

Apple rose 4.2% and contributed nearly 58 points to the Dow by itself. It was also the sixth-best performer among Nasdaq 100 stocks.

The tariff delays were concentrated on a wide variety of goods that are big sellers in the holiday shopping season, including cell phones, tennis racquets, video game consoles, computer keyboards, footware and clothing.

The White House had vowed to impose the tariffs on Sept. 1, but the announcement in late July unnerved markets, unleashing wild swings in U.S. stock prices. Tariffs will be imposed Sept. 1, on a number of products, including food products.

The Dow was up nearly 530 points before some traders sold to lock in profits. Twenty-seven of the 30 Dow stocks were higher. Two of the decliners -- Boeing (NYSE:BA) and IBM (NYSE:IBM) -- were off very slightly.

Worries that China was about to send troops into Hong Kong to quell local protests appeared to have a modest effect on the markets, but analysts said markets would react unfavorably to such news.

Crude oil prices were higher as the rally took off. West Texas Intermediate crude rose $2.17 to $57.10 a barrel. Brent crude rose $2.73 to $61.30 a barrel.

Gold, however, fell back, with the December futures contract settling at $1,512.30 an ounce, off $5.

But there remained worries about global growth as the trade fight between Washington and Beijing grinds on. Investors could see it in the narrowing spread between 2-year Treasury securities and the 10-year note. Many analysts believe a 10-year that's less than a 2-year yield (inversion) is a strong signal that a recession is coming.

The 10-Year Treasury yield closed at 1.702%, after falling to as low as 1.618%. The 2-Year Treasury yield rose to 1.673%, bring the spread to just 2.9 basis points, or 2.9 one-hundredths of a percentage point.

Technology stocks, consumer discretionary stocks, communications services shares (which include Facebook (NASDAQ:FB) and Google parent Alphabet (NASDAQ:GOOGL)), were among the strongest sectors. Realvestate and utility stocks were basically flat.

Department store giant Macy’s (NYSE:M) and Briggs & Stratton (NYSE:BGG) are among companies reporting quarterly results on Wednesday.

Winners and Losers in the S&P 500

Cyber-security company Symantec (NASDAQ:SYMC), Best Buy (NYSE:BBY), Micron Technology (NASDAQ:MU) and discount retailer Dollar Tree (NASDAQ:DLTR) were among the top S&P 500 performers on Tuesday.

Utility giant Southern Company (NYSE:SO), oil-and-gas producer Cabot Oil & Gas (NYSE:COG), oil-services company Helmerich and Payne (NYSE:HP) and apartment developer United Dominion Realty Trust (NYSE:UDR) were among the weakest S&P 500 performers.

Stocks - Huge Wall Street Rally Greets Tariff Delay
 

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Jack Drummond
Jack Drummond Aug 14, 2019 12:59PM ET
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Dewey Defeats Truman !!
clive rodgers
cgradge Aug 14, 2019 12:40AM ET
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A  "huge Wall Street rally"? Probably a timid exhaustion rally.
Nonie Bates
Nonie Bates Aug 14, 2019 12:32AM ET
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I think the rally is temporary.
Zach Lohman
Zach Lohman Aug 13, 2019 11:10PM ET
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I find it funny that the market still rallied on a move that didn't ease trade tensions at all and wasn't the intent. Was a slight boon to the US consumer worth it?
Adamo Nals
Adamo Nals Aug 13, 2019 8:14PM ET
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Buy vxx calls the vixy spy puts gold or target. That’s really all you should be doing and less you’re a five-year investor or longer. We need to come back down to the 2650 to 2700 range at the minimum. Tiananmen Square part two is about to happen unfortunately. Good for Hong Kong residence flat out resisting communism
Zach Lohman
Zach Lohman Aug 13, 2019 8:14PM ET
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Having some yen too.
Adamo Nals
Adamo Nals Aug 13, 2019 8:13PM ET
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It reminds me exactly the December dead cat bounce and then boom lower. The yields will invert and you will see the market crash. But that is healthy. Where we are now is not healthy. What happened today was not healthy. CPI data coming in hotter there will be no more rate cuts and the market has three priced in. Do the math
Adamo Nals
Adamo Nals Aug 13, 2019 8:11PM ET
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There will be no trade deal, china will never change their laws so there will be no deal. Argentina the 2/10 split on bonds, Iran, North Korea, Brexit, still tariffs going on on 140 billion. And many other problems all almost at all time highs. Don’t be sucked into this market which is clearly going lower. Way overpriced for the situation we are in
Adamo Nals
Adamo Nals Aug 13, 2019 8:09PM ET
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How bt this. Tberes about 12 catastrophic global emergencies that are happening. China is going into hong kong as we speak. Dead cat bounce and 2700 is coming any day. Theres just way way too many problems and the market is priced way too high. Period.
Petr Blaheta
Petr Blaheta Aug 13, 2019 4:53PM ET
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Before predident election ?
Sabelo Khehla Dlamini
Sabelo Khehla Dlamini Aug 13, 2019 4:47PM ET
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What will happen should we expect nas drop
Tom OKray
Tom OKray Aug 13, 2019 4:21PM ET
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Just think what the market would do if all tariffs were stopped, DOW +30,000 easy.
Delonte Crosby
Delonte Crosby Aug 13, 2019 4:21PM ET
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Every stock would have went through the roof .If that would have happened 2 weeks ago then I would be sitting on something nice right now.
Delonte Crosby
Delonte Crosby Aug 13, 2019 4:21PM ET
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It will happen. Long as they don't change things up .
Refentse Molaiwa
Refentse Molaiwa Aug 13, 2019 4:21PM ET
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Will Nasdaq100 drop because of the Trade War?
Delonte Crosby
Delonte Crosby Aug 13, 2019 4:21PM ET
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Dropped is not the word for what happen to them. It leaped down to ****and got stuck. .It took two weeks for them to get back to 8000
Luqman Firdaus
Luqman Firdaus Aug 13, 2019 4:20PM ET
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bisnis saham money $ 67 juta
 
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