U.S. stocks are climbing as industrial and internet companies and retailers rise, putting the S&P 500 index on track for its first three-day winning streak since late November and more in Tuesday’s Stock Market Update.
The latest round of trade talks between the U.S. and China ended without word of progress, but with no evident signs of setbacks either. That was enough to clear the way for more gains for stocks.
STOCK MARKET UPDATE
KEEPING SCORE: The S&P 500 index rose 24 points, or 1.0 percent, to 2,574 at closing time. The Dow Jones Industrial Average picked up 256 points, or 1.1 percent, to 23,787. Early in Tuesday’s trading, the Dow jumped as much as 333 points.
The Nasdaq composite gained 73 points, or 1.1 percent, to 6,897. The Russell 2000 index of smaller-company stocks added 19 points, or 1.4 percent, to 1,425. Those indexes have done better than the rest of the market in the last two weeks after big losses in late 2018.
TRADE TALKS: There was no evidence Tuesday that the U.S. and China made significant progress in their latest round of trade talks, and experts say it will take months for them to resolve the causes of the trade war, which include disagreements over Beijing’s handling of technology and intellectual property. But investors have become notably more optimistic about an eventual deal, a sharp reversal of the concerns that helped send stocks plunging in October and December. An agreement between the two biggest economic powers in the world could remove a major obstacle to global economic growth.
THE QUOTE: Kate Warne, an investment strategist for Edward Jones, said the market’s large moves in recent weeks reflect investors’ questions about major issues including economic growth, the threats of recession and trade tensions, and rising interest rates. She said it’s normal for stocks to repeatedly change course as traders grapple with those issues on a day-to-day basis.
“You have new information that’s driving stock prices both higher and lower, and that’s pretty typical when there’s uncertainty and there’s a lot of new information coming into the market,” she said.
Warne added that trading on Wall Street is typically light during the holidays, and that may have contributed to the huge swings in late December and early January.
ALL THE LIVE-LONG DAY: Union Pacific surged 8.5 percent to $150.250 after it hired longtime Canadian National railroad executive Jim Vena as its chief operating officer. Other transportation and industrial companies also jumped Tuesday as investors became more optimistic about continued economic growth. Aerospace giant Boeing rose 3.4 percent to $339.39.
Among communications companies, Facebook rose 2.8 percent to $141.98. Verizon added 2.7 percent to $58.24 after it reported strong wireless subscriber gains in the fourth quarter. Among consumer-focused companies, Amazon gained 1.8 percent to $1,658 and Nike shot up 1.6 percent to $76.94.
ENERGY: Oil prices also continued to rally. U.S. crude rose for the eighth day in the last nine and jumped 2.6 percent to $49.78 per barrel in New York. Brent crude, used to price international oils, gained 2.4 percent to $58.72 a barrel in London.
U.S. crude dropped from $76 a barrel in early October to about $42 a barrel on Dec. 24 as investors worried about slowing economic growth and a supply glut.
CRACKED SCREEN: South Korean smartphone and computer chip maker Samsung said demand for chips is weak because the global economy is slowing. Last week Apple said its iPhone sales in China slumped, which traders took as a warning sign about its economy.
Samsung stock fell 1.7 percent in Seoul and U.S. chipmakers also fell. Nvidia lost 2.2 percent to $140.29 and Applied Materials dropped 3.9 percent to $32.95.
CHECK ENGINE: Car retailer AutoNation said 2019 will be challenging year for sales, and its stock lost 4.3 percent to $36.05. The company also said it is restructuring its business, and several top executives including its chief operating officer are departing. Used car dealership CarMax gave up 2.9 percent to $64.51 while auto parts retailer AutoZone skidded 1.2 percent to $812.39.
BONDS: Bond prices fell and yields rose, a sign investors expect continued economic growth and higher interest rates. The yield on the 10-year Treasury note rose to 2.71 percent from 2.65 percent late Monday.
Higher interest rates allow banks to make bigger profits on lending, but despite the increase Tuesday, banks stocks declined. Investors may have been preparing for future disappointment: analysts for Goldman Sachs lowered their forecasts for bond yields around the world because of slowing economic growth and tightening financial conditions. The yield on the 10-year Treasury note has fallen sharply since October, when it reached a seven-year high, and the report says yields “may have peaked for this (economic) cycle.”
CURRENCIES: The dollar edged up to 108.66 yen from 108.59 yen. The euro fell to $1.1441 from $1.1478.
OTHER COMMODITIES: Gold fell 0.3 percent to $1,285.90 an ounce and silver dipped 0.3 percent to $15.71 an ounce. Copper rose 0.7 percent to $2.66 a pound.
Wholesale gasoline rallied 1.6 percent to $1.36 a gallon while heating oil jumped 2.7 percent to $1.83 a gallon. Natural gas gained 0.8 percent to $2.97 per 1,000 cubic feet.
OVERSEAS STOCK MARKET UPDATE: France’s CAC 40 jumped 1.1 percent and Germany’s DAX rose 0.5 percent. Britain’s FTSE 100 rose 0.7 percent.
Japan’s Nikkei 225 index gained 0.8 percent and the Hang Seng in Hong Kong added 0.2 percent. The South Korean Kospi gave up 0.5 percent.
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