NEW YORK, Oct 29 — US stock indexes rose today, as gains in auto stocks, a recovery in tech company stocks and relief over an unchanged sovereign rating on Italy helped a rebound from last week’s steep global selloff.
Carmaker Ford Motor Co rose 6.2 per cent, while General Motors Co gained 4.5 per cent after Bloomberg reported China was planning to cut the tax levied on car purchases by half.
All of the 11 major S&P sectors were in positive territory with technology up 1.9 per cent, gaining the most, followed by the communication services sector, which rose about 2 per cent.
The two sectors house four of the five high-growth FAANG stocks. Facebook Inc, Apple Inc, Netflix Inc and Alphabet GOOGL.O were up between 1.2 per cent and 2.2 per cent. Amazon.com Inc, part of consumer discretionary and another stock hit heavily by unusually shaky tech results last week, was trading flat.
Wall Street has been rocked by jitters over geopolitical events as well as fears over tariffs, rising wages and borrowing costs, putting the benchmark S&P 500 on track for its worst monthly performance since May 2010.
“Investors are coming in today from an oversold market last week,” said Art Hogan, chief market strategist at B. Riley FBR in New York. “Markets are set to have a positive reaction to any form of good news.”
Relief over Italy dodging a ratings downgrade helped global sentiment and overturned an earlier fall in US stock futures due to data showing China’s industrial profit growth slowed for a fifth straight month in September.
The slowdown in China, a major source of income for several American companies, has been a concern this earnings season, with a slew of corporates from industrials to chipmakers giving discouraging forecasts.
While healthy third-quarter results have pushed up third-quarter profit estimates at S&P companies to 25.2 per cent from 21.8 per cent in the past 10 days, dour forecast have pulled down the current-quarter’s growth outlook to 19.5 per cent from 19.9 per cent, according to Refinitiv data.
At 10:08am ET the Dow Jones Industrial Average was up 340.01 points, or 1.38 per cent, at 25,028.32, the S&P 500 was up 1.6 per cent at and the Nasdaq Composite was up 122.49 points, or 1.71 per cent, at 7,289.71.
Also offering support was data that showed US consumer spending for September rising in line with expectations and income recording its smallest gain in more than a year, suggesting a moderation in spending in the future.
Shares of IBM Corp fell nearly 2 per cent after the company agreed to buy software company Red Hat Inc for US$34 billion. Red Hat shares soared 47 per cent.
Tesla Inc rose 2.5 per cent as the Times reported that the electric carmaker’s third largest shareholder, Baillie Gifford & Co, would be willing to inject more cash in the company. — Reuters
Source: The Malay Mail Online