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US Stocks End Tumultuous Third Quarter With a Gain

Closing Bell

Stocks rose on Wall Street, capping another turbulent quarter with modest gains and more in Monday’s Stock Market Update.

Technology and health care stocks led the way, as nearly three stocks rose for every two that fell on the New York Stock Exchange. Apple rose 2.3%, and Merck jumped 1.5%.

Banks wobbled between small gains and losses while energy companies slid with declining oil prices. National Oilwell Varco lost 3.8%, and ConocoPhillips fell 1.5%.

Bond prices were steady. The yield on the 10-year Treasury held at 1.67%, where it was late Friday.

Some signs of progress in the U.S.-China trade war helped to lift stocks Monday. China said on Sunday that its top trade negotiator will lead talks that are expected to take place after Oct. 7. The reassuring news follows a report Friday that the U.S. might seek to escalate the feud again by considering ways to limit U.S. investments in China. The Treasury Department, though, said there weren’t currently plans to block Chinese companies from listing shares on U.S. stock exchanges.

STOCK MARKET UPDATE

KEEPING SCORE: The S&P 500 rose 14 points, or 0.5%, to 2,976. It rose 1.2% for the quarter. The Dow Jones Industrial Average rose 96 points, or 0.4%, to 26,916. The Nasdaq rose 59 points, or 0.8%, to 7,999.

CHOPPY QUARTER: Stock markets around the world heaved up, down and back again during the quarter, usually with worries about President Donald Trump’s trade war with China.

Trump shocked markets in August when he said he’s raise tariffs on Chinese goods, which sent stocks and bond yields sinking. Stocks started climbing again in September as both sides made conciliatory moves to ease tensions ahead of another round of planned talks in October.

Yields, meanwhile, remain lower for the quarter after the Federal Reserve cut short-term rates twice. They were the first rate cuts by the Fed since the financial crisis was swamping the economy in 2008.

The S&P 500 and the Dow ended the quarter with gains of a little more than 1%. The technology-heavy Nasdaq never fully recovered from the August hit and is close to flat.

Small companies took more damage, as they typically do when investors are worried about the threat of a recession. The Russell 2000 lost 2.3%.

ANALYST’S TAKE: Investors are putting a frustrating quarter behind them and gearing up for what could be another tough period. Even beyond the U.S.-China talks, the next three months have plenty of factors to keep markets on edge. Besides the United Kingdom’s pending exit from the European Union, investors are also waiting to see whether Germany will enter a recession and how the new incoming head of the European Central Bank performs.

Closer to home, the impeachment inquiry into Trump could throw up more uncertainty.

“The consumer’s been enough to keep the economy moving, but things like consumer confidence seem to be plateauing,” said Emily Roland, co-chief investment strategist at John Hancock Investment Management.

The latest earnings results from companies in the next few weeks will give investors a better picture of the economy’s potential direction. “We need that earnings engine to kick in to drive markets higher,” Roland said.

HOME STRETCH AHEAD: Investors are heading into the final quarter of 2019 with the trade war hanging over the market and corporate financial results on the way in mid-October.

The next round of trade negotiations could be the key to heading off another round of destructive tariffs in December. Both sides have postponed some of the more worrisome tariff increases, which would more directly raise prices on consumer goods and potentially crimp consumer spending.

Investors will soon get a better glimpse of the trade war’s impact with the next round of corporate financial results later this month. Analysts are forecasting that profits will contract by more than 3%, according to FactSet.

Last year, the market slumped 14% in the fourth quarter as investors became rattled over a slowdown in economic growth and the Federal Reserve’s plans to keep raising interest rates. This time around, the Federal Reserve has shifted gears by cutting interest rates in an effort to help shore up economic growth. The central bank has signaled that it is ready to take additional measures, if necessary, to offset the damage being done by the trade war.

OVERSEAS: Stocks in Europe moved broadly higher. Unemployment in the 19 countries that use the euro fell in August to its lowest rate since May 2008, according to the European Union’s statistics agency. Germany, Europe’s biggest economy, separately reported a drop in its unemployment rate.

Asian markets were mixed. Chinese manufacturing improved in September, even as demand for Chinese goods has been hurt by slower economic growth and the trade feud with the U.S.

© The Associated Press. All rights reserved.

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