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Market Watch: Stocks turn higher as trade-war worries ease

June 27, 2018 - 11:42 am
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By STAN CHOE, AP Business Writer

NEW YORK (AP) — Stocks turned higher Wednesday after fears about an economy-rattling trade war stepped down a notch.

The Trump administration indicated it's shifting away from a plan to impose limits on Chinese investment in U.S. technology companies and high-tech exports to China. Instead, the administration is calling on Congress to enhance an existing review process.

Investors took it as a sign of a softer stance after escalating rounds of tough talk between the world's two largest economies, and U.S. stock indexes rose from the opening bell. Earlier, the futures market had indicated U.S. stocks were set for a weak open. The U.S. market's biggest gains came from stocks in the energy sector, which jumped with the price of oil.

KEEPING SCORE: The S&P 500 was up 17 points, or 0.6 percent, at 2,740, as of 10:30 a.m. Eastern time. Following Tuesday's modest gain, the index has clawed back more than half of Monday's 1.4 percent drop.

The Dow Jones industrial average gained 211, or 0.9 percent, to 24,494, and the Nasdaq composite rose 333, or 0.4 percent, to 7,594. Nearly two stocks rose for every one that fell on the New York Stock Exchange.

ENERGIZED STOCKS: The price of crude jumped on reports that the Trump administration is pushing other countries to stop importing oil from Iran. That helped drive energy stocks in the S&P 500 up 2.4 percent. That was nearly double the gain for any of the other 10 sectors that make up the index.

Concho Resources, a company that looks for oil and gas in New Mexico and west Texas, jumped 4.7 percent to $137.87. Helmerich & Payne, an oil drilling company, rose 4 percent to $65.58.

MARKETS ABROAD: European stocks erased earlier losses to climb. France's CAC 40 jumped 1.6 percent, Germany's DAX rose 0.3 percent and the FTSE 100 in London gained 1.2 percent.

Asian markets, which closed earlier, mostly fell. Japan's Nikkei 225 lost 0.3 percent, and South Korea's Kospi sank 0.4 percent.

CHINESE BEARS: The tough talk on trade between the world's two largest economies has hit Chinese stocks particularly hard, and China's Shanghai Composite index continued to plummet with a 1 .1 percent drop on Wednesday. It's down more than 20 percent from its late January level.

"To a large extent, the Chinese market is one driven by speculation," said Jingyi Pan, a market strategist at IG in Singapore. "With sentiment rolling over itself of late, particularly over the escalating trade tensions that seem to have no end, it should be of little surprise to find the market crumbling."

FILLING UP: Conagra Brands recorded the biggest loss among stocks in the S&P 500 after it agreed to buy Pinnacle Foods, the company behind Duncan Hines and Hungry-Man, in a deal that would create a frozen-food giant. The cash-and-stock bid is valued at more than $8 billion, not including Pinnacle Foods' debt.

Conagra also reported stronger earnings for the latest quarter than analysts expected. Its shares nevertheless dropped 6.6 percent to $35.71.

CURRENCIES: The dollar edged up to 110.40 Japanese yen from 110.13 yen late Tuesday. The euro fell to $1.611 from $1.1650, and the British pound dropped to $1.3152 from $1.3232.

YIELDS: The yield on the 10-year Treasury dropped to 2.84 percent from 2.88 percent late Tuesday. The two-year yield fell to 2.51 percent from 2.53 percent, and the 30-year sank to 2.98 percent from 3.02 percent.

COMMODITIES: The price of crude jumped after a report on oil supplies showed that inventories shrank more sharply last week. Benchmark U.S. crude rose $1.83, or 2.6 percent, to $72.36. Brent crude, the international standard, rose $1.56 to $77.70 per barrel.

Gold slipped $1.80 to $1,258.10 per ounce.

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AP Business Writer Joe McDonald contributed to this report from Beijing.

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