NEW YORK, Sept 12 — US stocks gained in morning trading today after the United States delayed scheduled tariff hikes on billions worth of Chinese imports, and the European Central Bank launched a stimulus drive to boost the ailing euro zone economy.
In a tweet that calmed trade tensions that have battered financial markets over the last year, President Donald Trump said the United States would delay increasing tariffs on US$250 billion (RM1.04 trillion) worth of Chinese imports by two weeks as “a gesture of good will”.
The decision comes after China extended an olive branch by exempting some US anti-cancer drugs and other goods from additional tariffs ahead of planned high-level trade negotiations.
All the major indexes hit a session high on a report that the Trump administration was considering an interim deal with China, but quickly pared gains after CNBC said that a senior White House official denied the report.
“It’s just what we should come to expect now,” Paul Nolte, portfolio manager at Kingsview Asset Management in Chicago said about the sporadic market movement on the contrasting reports.
“Both China and the United States are trying to reach across the aisle… but all they’ve done is kick the can further down the road.”
Trade-sensitive technology stocks provided the biggest boost among the 11 major S&P 500 sectors. The benchmark index rose to within 0.3 per cent of a record high hit in July.
The ECB approved a new stimulus package on Thursday, cutting deposit rates by 10 basis points to a record low and starting a bond buying program. The US Federal Reserve is also expected to cut interest rates at its policy meeting next week.
The ECB “pulling the trigger” helped lift the mood on Wall Street, but would not sway the US Federal Reserve’s decision next week, said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
The ECB move took a toll on US treasury yields across the board, which dragged down shares of banks by 0.31 per cent.
Separately, data today showed US underlying consumer prices in August recorded the largest annual gain in a year, while weekly jobless claims dropped to a five-month low.
At 11.18am ET the Dow Jones Industrial Average was up 48.88 points, or 0.18 per cent, at 27,185.92, the S&P 500 was up 8.61 points, or 0.29 per cent, at 3,009.54 and the Nasdaq Composite was up 36.44 points, or 0.45 per cent, at 8,206.12.
Energy stocks fell 0.78 per cent and were the biggest drag on the S&P as oil prices fell after a meeting of the OPEC+ alliance yielded no decision on deepening supply cuts.
Among industrial stocks, Deere & Co and Caterpillar Inc dropped after Wells Fargo downgraded their shares to “market perform”.
Baker Hughes fell 1.59 per cent after General Electric Co began divesting its stake in the oilfield services provider, aiming to raise US$2.7 billion.
Activision Blizzard Inc rose 2.39 per cent after two brokerages raised their price targets on the stock.
Advancing issues outnumbered decliners for a 1.10-to-1 ratio on the NYSE. Declining issues outnumbered advancers for a 1.07-to-1 ratio on the Nasdaq.
The S&P index recorded 33 new 52-week highs and no new low, while the Nasdaq recorded 57 new highs and 18 new lows. — Reuters
Source: The Malay Mail Online