Wall Street gains as trade talks advance, but yet to respond to Trump emergency
US-China trade talks are to continue next week with Trump’s national emergency something ‘brand new’ for the market
Bengaluru — US stocks posted broad-based gains on Friday, led by a rebound in financials, as investors were optimistic about the ongoing trade talks to resolve a bruising tariff dispute between the US and China.
US President Donald Trump said talks with China “are going extremely well”, and the US is closer than ever to having a “real” trade deal with Beijing. Discussions between the world’s largest economies will continue next week in Washington.
“Its just up-up we go, investors today seem to be picking up on every piece of news as the glass being half full with apparent progress on the US-China trade talks,” said Michael Geraghty, equity strategist at Cornerstone Capital Group in New York.
Hopes of a trade deal ahead of a March 1 deadline has helped the trade-sensitive industrial sector gain nearly 17% so far this year, making it the best performing S&P sector, which rose 0.95% boosted by bellwethers Boeing and Caterpillar.
Another concern is Trump declaring a national emergency in an attempt to fund his US-Mexico border wall without congressional approval.
“The ramifications of a national emergency might be very difficult for everyone to understand,” said Art Hogan, chief market strategist at National Securities in New York. “The use of a national emergency for an issue like this is brand new.”
Despite the prospects of a national emergency, all 11 major S&P sectors were trading higher with financials up 1.7%, leading the gains, after a more than 1% fall in the prior session.
The sector was hit by a fall in US treasury yields on Thursday after bleak retail sales data in December suggested a sharp slowdown in economic activity at the end of 2018.
At 4.22pm GMT the Dow Jones Industrial Average was up 305.53 points, or 1.2%, at 25,744.92; the S&P 500 was up 18.93 points, or 0.69%, at 2,764.66; and the Nasdaq Composite was up 16.85 points, or 0.23%, at 7,443.81.
Advancing issues outnumbered decliners for a 3.25-to-1 ratio on the NYSE and a 2.92-to-1 ratio on the Nasdaq. The S&P index recorded 40 new 52-week highs and no new low, while the Nasdaq recorded 60 new highs and 15 new lows.