Stocks Climb on Trade Optimism
10 October 2019 - 4:41AM
Dow Jones News
By Anna Isaac and Karen Langley
U.S. stocks rose Wednesday as investors awaited the resumption
of U.S.-China trade talks and looked for fresh signals from the
Federal Reserve on monetary easing.
The Dow Jones Industrial Average rose 0.7% and the S&P 500
climbed 0.9%. The gains were broad, with all 11 sectors of the
S&P rising, led by technology stocks.
Tensions between the U.S. and China appeared to ratchet up this
week as the U.S. imposed export restrictions on more than two dozen
Chinese firms and put visa restrictions on Chinese officials. But
market observers Wednesday pointed to optimism on the trade front
as Bloomberg reported that China was open to reaching a partial
deal.
"When there's a sense that we're going to get a positive
outcome, you see equities rally," said Shawn Cruz, manager of
trader strategy at TD Ameritrade. "When there's this sense they're
not going to be able to get a deal struck or make progress, then
you see equities sell off."
Investors have been parsing remarks from Federal Reserve
officials for fresh signals about U.S. monetary policy. Fed
Chairman Jerome Powell said Wednesday at an event in Kansas City
that the U.S. economy faces some risks but is in a good place
overall.
Later Wednesday, the U.S. central bank will release the minutes
from its September meeting, which will likely be scrutinized for
any insight into the interest-rate outlook. However, economic data
and market events since that meeting may have changed policy
makers' views.
"What the Fed minutes discuss is likely to be stale
information," said Jordan Rochester, foreign exchange strategist at
Nomura Bank. "The data has deteriorated since they had their
discussion. After the poor manufacturing figures more recently,
they softened their tones."
Among individual companies, Johnson & Johnson shares dropped
2% after a Philadelphia jury ordered the company to pay $8 billion
in damages to a man who said that using antipsychotic drug
Risperdal caused enlarged breasts. U.S. Steel shares fell 8.6%
after the company said it would cut costs and replace its chief
financial officer with another company executive.
The yield on the 10-year U.S. Treasury note inched up to 1.589%,
from 1.532% Tuesday. Yields rise as prices fall.
In Japan, the benchmark Nikkei 225 index slipped 0.6% as data on
machine-tool orders confirmed a bleak picture for the country's
manufacturing sector. Hong Kong's Hang Seng dropped 0.8% amid
tensions over protests in the city.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
October 09, 2019 13:26 ET (17:26 GMT)
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