Wall Street seesaws higher after comments by US Fed chief

The S&P 500 is up about 10 per cent from a 20-month low it touched around Christmas, lifted by hopes for a US-Chinese trade deal. — Reuters pic
The S&P 500 is up about 10 per cent from a 20-month low it touched around Christmas, lifted by hopes for a US- trade deal. — Reuters pic

WASHINGTON, Jan 11 — rose in a seesaw session yesterday, tentatively on track for its fifth straight day of gains as investors responded to mixed comments by Federal Reserve Chairman Jerome Powell, while a warning from Macy’s pummeled retail stocks.

Powell reiterated the views of other policymakers that the Fed would be patient about interest . But major stock indexes temporarily moved into negative territory after Powell said the bank’s balance sheet would be “substantially smaller,” and after he raised concerns about the size of US debt.

“That’s what spooked the market a little bit. It’s more of a commentary on the entire economy as a whole,” said Randy Frederick, vice president of trading and derivatives for Charles Schwab in Austin.

The S&P 500 is up about 10 per cent from a 20-month low it touched around Christmas, lifted by hopes for a US-Chinese trade deal, which eased some worries over the impact of the dispute on .



If the S&P 500 ends the day in positive territory, it would be the fifth straight session of gains, its longest winning streak since September.

Trade-related optimism somewhat faded as offered little in the way of details on key issues such as forced technology transfers, intellectual property rights, tariff barriers and cyber attacks.

The lack of clarity, coupled with weak economic data in China and France, rekindled worries about global growth.

In the United States, reports from Macy’s and American Airlines added to fears that growth of corporate profits would shrink, concerns that were also exacerbated by ’s sales warning last week.

Macy’s Inc plunged 18 per cent after the department store operator cut its same-store sales forecast for the full-year because of weak demand during mid-December.

S&P 500 companies on average are seen posting 14.5 per cent growth in earnings per share as they report December-quarter results over the next few weeks, according to IBES data from Refinitiv. However, expectations for growth in 2019 stand at 6.4 per cent, down from an expectation of 7.3 per cent on Jan 1.

“It could be a good quarter, but maybe with more cautious outlooks until we get something that comes out of the trade negotiations,” said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia. “There is a lot of uncertainty there.”

At 2:53pm EST, the Dow Jones Industrial Average was up 0.06 per cent at 23,893.58 points, while the S&P 500 had gained 0.04 per cent to 2,585.91.



The Nasdaq Composite was flat at 6,957.15.

Trade-sensitive industrial stocks rose 1.17 per cent, lifted by Boeing Co, which gained 1.98 per cent after the US accepted its long-delayed KC-46 air tanker.

American Airlines Group Inc fell 4.09 per cent after the No. 1 US carrier cut its fourth-quarter profit and unit revenue forecasts. That weighed on other airline shares as well.

Advancing issues outnumbered declining ones on the NYSE by a 1.26-to-1 ratio; on the Nasdaq, a 1.04-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and one new low; the Nasdaq Composite recorded 18 new highs and 10 new lows. — Reuters

Source: The Malay Mail Online





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