Wall Street rallies on stimulus cheer, trade optimism - Metro US

Wall Street rallies on stimulus cheer, trade optimism

FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 12, 2019. REUTERS/Eduardo Munoz
By Medha Singh

By Medha Singh

(Reuters) – U.S. stocks surged on Monday, building on previous session’s rally, fueled by growing hopes that major economies would act to prop up slowing growth, while technology stocks got a lift from trade optimism.

China’s central bank unveiled a key interest rate reform on Saturday to help steer borrowing costs lower for companies, close on the heels of reports of a potential German economic easing.

After the three main Wall Street indexes racked up their third straight weekly loss despite Friday’s bounce, investors will look to weigh trade risks and signs of slowing growth against the potential for more action from the U.S. Federal Reserve and others in September.

The focus this week will be on Wednesday’s release of minutes from the Fed’s July policy meeting, when the central bank cut rates for the first time in more than a decade, and Chair Jerome Powell’s speech at a central banks meeting in Jackson Hole on Friday.

“There is hope you are going to see some sort of stimulus by the United States … Some believe the selloff recently was a bit overdone,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

Shares of Apple Inc provided the biggest boost to the three main Wall Street indexes. President Donald Trump said on Sunday that he had spoken with Apple Chief Executive Tim Cook about the impact of U.S. tariffs.

“There is a recognition that this trade policy is having a negative impact on the economy. With the election coming up next year, there maybe an incentive to get these trade issues behind. Trump does seem to listen if the voices are loud enough,” Brown said.

Adding to the optimism around trade, Washington extended a reprieve given to Huawei Technologies that permits the Chinese firm to buy supplies from U.S. companies.

Tariff-sensitive chipmakers gained with the Philadelphia chip index <.SOX> up 2.06%.

At 11:06 a.m. ET, the Dow Jones Industrial Average <.DJI> was up 260.43 points, or 1.01%, at 26,146.44, the S&P 500 <.SPX> was up 34.36 points, or 1.19%, at 2,923.04. The Nasdaq Composite <.IXIC> was up 112.95 points, or 1.43%, at 8,008.95.

All of the 11 major S&P sectors were higher with a 1.7% rise in energy sector <.SPNY> leading the gainers. Defensive consumer staples <.SPLRCS>, utilities <.SPLRCU> and real estate <.SPLRCR> posted the smallest gains.

Estee Lauder Cos Inc jumped 8.6% as it forecast full-year revenue and profit above estimates, bolstered by booming demand for its premium skincare products and strength in its Asia-Pacific business.

Advancing issues outnumbered decliners by a 3.68-to-1 ratio on the NYSE and by a 3.24-to-1 ratio on the Nasdaq.

The S&P index recorded 45 new 52-week highs and no new low, while the Nasdaq recorded 60 new highs and 34 new lows.

(Reporting by Medha Singh and Akanksha Rana in Bengaluru; Editing by Saumyadeb Chakrabarty)

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