S&P 500 hits record high as trade optimism boosts techs

The benchmark index surpassed its previous record high of 2,964.15 hit on June 21. — Reuters pic
The benchmark index surpassed its previous record high of 2,964.15 hit on June 21. — Reuters pic

NEW YORK, July 1 — Gains in technology stocks lifted the S&P 500 to a record high today, powered by growing optimism around US- trade talks and a likely reprieve for telecoms company Huawei.

The benchmark index hit an intraday high of 2,977.93, surpassing its previous record high of 2,964.15 touched on June 21, as the truce agreed upon at the G20 summit boosted risk appetite.

“We’re right back on track,” US President Donald Trump said after the world’s two largest agreed to restart talks. Trump also offered concessions including no new tariffs and an easing of restrictions on Huawei Technologies Co Ltd, while China agreed to make unspecified new purchases of US farm products.

Tech stocks, which are ’s top performers so far in 2019, jumped 1.80 per cent, with heavyweight Inc’s 2.9 per cent gain providing the maximum support.

Chipmakers with a sizeable revenue exposure to China jumped, fuelling a 3.76 per cent gain in the Philadelphia Semiconductor index. Huawei suppliers Intel Corp gained 1.4 per cent, while Micron Technology Inc surged 6.1 per cent.

“Any step towards a trade resolution, and it doesn’t have to be a lot of progress — just a step, is viewed very positively by markets,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

“And investors at this point are trying to focus on the positive in hopes that there will be some trade resolution down the line.”

Stocks saw their steepest sell-off this year in May after a breakdown in the US-China trade negotiations sparked concerns of a slowdown.

However, expectations of a more accommodative Federal Reserve helped the S&P 500 and the Dow Jones Industrial Average index post their best June performance in generations.

Despite the latest development in trade talks, traders are still expecting the Fed’s next move will be an interest rate cut as soon as at its July 30-31 policy meeting.

At 10.01am ET, the Dow Jones Industrial Average was up 239.94 points, or 0.90 per cent, at 26,839.90 and the S&P 500 was up 29.26 points, or 0.99 per cent, at 2,971.02.

The Nasdaq Composite was up 116.02 points, or 1.45 per cent, at 8,122.26. Shares of volatile favourites — Microsoft Corp , Alphabet Inc, and Amazon.com Inc also helped boost the tech-heavy index.

A rise in oil prices lifted energy stocks by 1.21 per cent. Opec and its allies looked set to extend supply cuts until at least the end of 2019 at their meeting in Vienna this week.

Wynn Resorts Ltd, Melco Resorts & Entertainment Ltd and Las Vegas Sands Corp jumped between six per cent and 8.2 per cent after gambling revenue in the Chinese territory of Macau rose more than expected in June.

The demand for riskier assets halted a recent rally in safe-haven bet , with prices tumbling as much as two per cent.

Advancing issues outnumbered decliners by a 3.25-to-one ratio on the NYSE and by a 2.36-to-1 ratio on the Nasdaq.

The S&P index recorded 55 new 52-week highs and no new low, while the Nasdaq recorded 97 new highs and five new lows. — Reuters

Source: The Malay Mail Online

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