Select Page

US Stocks Move Higher as China Eases Trade Tensions

US Stocks Move Higher as China Eases Trade Tensions

Stocks closed broadly higher on Wall Street as investors welcomed China’s move to exempt some U.S. products from a recent round of tariffs and more in Wednesday’s Stock Market Update.

Technology, health care and communication services stocks powered much of the gains Wednesday for the S&P 500, which has been essentially flat for much of the week. Investors also continued to favor smaller-company stocks.

Apple climbed 3.1% a day after announcing a new lineup of iPhones and a low-priced video streaming service to compete with Netflix.

Health care and communications stocks also made strong gains. Medtronic climbed 1.1% and AT&T added 3.1%.

The financial sector wobbled between small gains and losses after pulling out of an early slide. Wells Fargo gained 1.1%.

Energy stocks fell the most as the price of U.S. crude oil slumped 2.9%. Chevron slid 0.4%.

Bond prices fell. The yield on the 10-year Treasury rose to 1.74% from 1.70% late Tuesday.

China on Wednesday said it will exempt American industrial grease and some other imports from tariff increases, though it kept in place penalties on soybeans and other major U.S. exports ahead of negotiations next month.

The move could indicate that both sides are settling in for an extended conflict even as they prepare for talks in Washington aimed at ending the dispute that threatens global economic growth.

Financial markets have been roiled this summer as the trade war escalated. Investors worry the impact of tariffs and a slowing global economy could tip the U.S. into a recession. The economic uncertainty has also become a drag on companies.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 rose 21 points, or 0.7%, to 3,000. The Dow Jones Industrial Average rose 227 points, or 0.8%, to 27,136. The Nasdaq climbed 85 points, or 1.1%, to 8,169.

Investors continued to shift money to smaller-company stocks. The Russell 2000 index climbed 2.1%, far outpacing the broader market.

Major indexes in Europe rose broadly.

ANALYST’S TAKE: In the first couple days of this week investors favored stocks that sold off in recent weeks, including energy and financials. But the trend reversed Wednesday, as traders bid up technology and other more growth-oriented stocks.

“Today you have a little bit of a rotation back,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. “You’re getting some movement that trade may not be as bad as we think, with China relieving some of the restrictions on its own tariffs.”

DEEP EXHALE: Shares in tobacco giant Altria Group rose after a brief slide following the Trump administration’s announcement that it is looking to ban thousands of flavors used in e-cigarettes amid an outbreak of breathing problems tied to vaping. State and federal health authorities are investigating hundreds of breathing illnesses reported in people who have used e-cigarettes and other vaping devices. No single device, ingredient or additive has been identified. Altria rose 1.1%.

WEAK GAME: GameStop plunged 9.8% after the video game retailer slashed its full-year profit forecast following a disappointing second quarter. The company continues to struggle as it competes with online game sellers. It is also spending to revitalize existing locations in an effort to attract more customers, but said it will take time to see any results.

ARCADE MIRE: Dave & Buster’s Entertainment fell 4.6% after the restaurant and arcade operator cut its sales forecast for the year. The company is facing increased competition. The downturn hit food and beverage sales especially hard during the second quarter.

A GOOD LOOK: Shares in RH, the owner of furniture company Restoration Hardware, rose 5% after its latest quarterly results topped Wall Street’s expectations. The company also raised its financial forecast for the year.

© The Associated Press. All rights reserved.