Wall Street pushes higher on trade talk optimism
(Reuters) – U.S. stocks jumped about 1.6 percent on Wednesday, bolstered by the technology sector, as signs Beijing would ease its “Made in China 2025” industrial policy added to optimism fueled by President Donald Trump’s upbeat comments on trade talks.
Trump, in an interview with Reuters, said trade talks were already underway and that China was buying a “tremendous amount” of U.S. soybeans.
China, the largest buyer of U.S. soy, made the first major U.S. soybeans purchase on Wednesday, since Washington and Beijing agreed to a temporary trade truce earlier this month, Reuters reported.
Trump also said he would intervene in the case against a top executive at Huawei Technologies if it would help secure a trade deal.
“Sentiment is driven by positive news that there might be progress with U.S. and China negotiations – which, I think, will be the number 1 headline for the next three months,” said Tom Plumb, president of Plumb Funds in Madison, Wisconsin.
The S&P technology sector .SPLRCT gained 2.21 percent, providing the biggest support to the market. The sector, which is heavily exposed to China, is among the most beaten-down this quarter.
Another trade-sensitive sector, industrials .SPLRCI, rose 1.89 percent on strength in Caterpillar Inc (CAT.N) and Boeing Co (BA.N).
However, Plumb said he would not be surprised to see the market drift again around afternoon, in line with recent trend.
“We are seeing some year-end positioning. Many people who bought into the stock market into the fall have significant losses on their portfolio and they will probably put some selling pressure,” Plumb said.
Trading has been especially choppy in the past two days amid a slew of headlines on topics ranging from trade to Britain’s planned divorce from the European Union and a U.S. government shutdown.
A potential source of worry for market participants is the result of a no-confidence vote against British Prime Minister Theresa May at 2100 GMT (4 p.m. ET), though a growing number of Conservative lawmakers have indicated support.
At 12:55 a.m. EDT the Dow Jones Industrial Average .DJI was up 410.12 points, or 1.68 percent, at 24,780.36, the S&P 500 .SPX was up 44.60 points, or 1.69 percent, at 2,681.38 and the Nasdaq Composite .IXIC was up 154.87 points, or 2.20 percent, at 7,186.70.
The other big boost came from a more than 2-percent gains in health .SPXHC and consumer discretionary .SPLRCD stocks.
Christopher Larkin, senior vice president of trading at E-Trade Financial in New York, said his retail clients were using the recent dips as an opportunity to pick up some bargains.
The laggards were the defensive consumer staples .SPLRCS, utilities .SPLRCU and real estate .SPLRCR sectors.
China-based music streaming company Tencent Music Entertainment (TME.N) jumped 8.69 percent in its U.S. debut.
Verizon Communications Inc (VZ.N) shares fell 2.22 percent after Morgan Stanley downgraded the stock.
Advancing issues outnumbered decliners by a 3.63-to-1 ratio on the NYSE and a 3.35-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and five new lows, while the Nasdaq recorded 18 new highs and 117 new lows.
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