Tech stocks lift Wall Street as reports brighten hopes of trade deal

A man walks through the rain on Wall Street outside the New York Stock Exchange October 9, 2019. — Reuters pic
A man walks through the rain on outside the New York Stock Exchange October 9, 2019. — Reuters pic

NEW YORK, Oct 10 — Wall Street rose for the first time in three sessions yesterday with technology stocks providing a boost, as a report that was open to a partial trade deal soothed investor nerves ahead of high-level talks today.

Shares in Microsoft Corp and Inc rose more than 1 per cent and were among the biggest boosts to the S&P 500. The technology sector rose 1.4 per cent.

Chipmakers with a sizable exposure to China also gained, with the Philadelphia SE Semiconductor index up about 2 per cent.

China was still open to agreeing to a partial trade deal with the United States, despite the inclusion of top artificial intelligence startups in a trade blacklist, according to a Bloomberg report.



Separately, the Financial Times said Beijing was offering to increase its annual purchases of US agricultural products.

“Investors are hoping for an interim deal, they aren’t expecting anything big, but are cautiously optimistic,” said Michael Geraghty, equity strategist at Cornerstone Capital Group.

Trade tensions, efforts to impeach President Donald Trump and signs of slowing economic growth have taken a toll on in October, with the S&P 500 and Dow Jones indexes off about 2 per cent since the end of September.

Rising geopolitical risks have also not offered investors any respite. President Tayyip Erdogan said yesterday a military operation targeting Kurdish fighters in northeast Syrian had begun.

A sharp contraction in US manufacturing data, as well as a dismal reading on business activity last week has raised bets of a third interest rate cut by the Federal Reserve this year.

Fed Chair Jerome Powell flagged openness to further rate cuts on Tuesday. At 2 pm ET, the is due to release minutes from its September meeting.

The session’s gains were broad-based, with all the major S&P 500 sectors trading higher and 29 of the 30 components of the blue-chip Dow Jones Industrial Average index in positive territory, with Johnson & Johnson the only decliner.

The drugmaker’s shares dropped 2 per cent after a jury awarded US$8 billion (33.5 billion) in punitive damages to a man who accused it of failing to warn that young men using its antipsychotic drug Risperdal could grow breasts.



Investors will now turn their eye to the third-quarter earnings season, which begins next week with US banks reporting, to gauge the health of the domestic economy.

Analysts expect the worst quarterly profit performance since 2016, with earnings for S&P 500 companies estimated to fall 3.1 per cent from a year earlier, based on IBES data from Refinitiv.

“The corporate earnings growth has been stagnating and it just shows that these tariffs have hit corporate profit growth,” Geraghty said.

The Dow Jones Industrial Average was up 165.11 points, or 0.63 per cent, at 26,329.15, the S&P 500 was up 23.37 points, or 0.81 per cent, at 2,916.43 and the Nasdaq Composite was up 76.71 points, or 0.98 per cent, at 7,900.49.

The communication services sector posted the smallest gain among the 11 major sectors, weighed by Netflix Inc , which was down 1.6 per cent after two brokerages cut price targets on the video streaming service provider’s shares.

Advancing issues outnumbered decliners for a 2.11-to-1 ratio on the NYSE and a 1.66-to-1 ratio on the Nasdaq.

The S&P index recorded nine new 52-week highs and 10 new lows, while the Nasdaq recorded five new highs and 86 new lows. — Reuters

Source: The Malay Mail Online







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