sunny.png
Friday August 23rd, 2019 11:35AM

Stocks soar after US delays plans for some China tariffs

By The Associated Press
Related Articles
  Contact Editor

And back up goes the stock market.

Investors flipped back into buying mode Tuesday after the U.S. said it would hold off on tariffs of Chinese imports of mobile phones, toys and several other items typically on holiday shopping lists. China also said the two sides held discussions on trade overnight and would talk again the next two weeks.

The latest turn in the U.S.-China trade war helped the market erase most of the losses from the previous two days. The S&P 500 was up 1.6%, as of 3:27 p.m. Eastern time and earlier had been up as much as 2.1%. The Dow Jones Industrial Average rose 389 points, or 1.5%, to 26,288, and the Nasdaq composite jumped 2%. Oil and copper prices surged.

The markets have been in the spin cycle since President Donald Trump announced on Aug. 1 that he would impose 10% tariffs on about $300 billion in Chinese imports, which would be on top of 25% tariffs already in place on $250 billion of imports. The threat dashed hopes that a resolution may come soon in the trade war between the world's two largest economies, and investors have grown increasingly concerned that it may drag on through the U.S. elections in 2020.

On Tuesday, The Office of the U.S. Trade Representative said it would delay the tariffs on some products, including popular consumer goods, until Dec. 15. A few other products were removed altogether, including certain types of fish and baby seats.

"Maybe today is a little bit too exaggerated because it was a little glimmer of hope about tariffs," said Karyn Cavanaugh, senior markets strategist at Voya Investment Management. "However, the drama with China and trade is not over."

While stocks rallied Tuesday, there are still signs of investor caution. Treasury yields have sunk, and gold prices have jumped as investors searched for safety on worries the trade war could knock the U.S. economy back into recession for the first time in a decade. The yield on the 10-year Treasury rose Tuesday, but it remains below its level when Trump's 2016 election invigorated markets. Gold fell just 0.2% and remains near a six-year high.

Retailers were some of Tuesday's best performers because the delay in tariffs means they won't have to raise prices on toys, clothing and other items during the holiday shopping season, the most important months of the year for the industry. Best Buy jumped 6.7%, one of the biggest gains in the S&P 500, and Dollar Tree rose 3.7% for its best day since March.

"This is a huge relief for retailers for the holiday 2019 season, but the larger issue isn't over," said Ken Perkins, president of RetailMetrics, a retail research firm. "Retailers better be planning to diversify their sourcing even though they're getting some short-term relief."

Other companies that have a lot riding on strong holiday sales, as well as a dependence on China for producing their goods, were also among the market's leaders. Hasbro gained 3%, Micron Technology jumped 4.9% and Apple climbed 4.4%.

Meanwhile, shares in CBS and Viacom rose after the companies announced they have reached a deal to combine into one company named ViacomCBS. The long-anticipated combination brings together the television networks and the Paramount movie studio as traditional media giants bulk up to challenge streaming companies like Netflix. CBS gained 1.4% and Viacom rose 1.7%.

Bonds fell and the yield on the two-year Treasury jumped, partially due to the trade-war developments and partially because inflation was higher than economists expected last month. The inflation report may give the Federal Reserve less leeway to cut interest rates to help the economy.

The 10-year Treasury yield, meanwhile, rose by a smaller margin, to 1.68% from 1.64% late Monday. That leaves the 10-year Treasury yielding just 0.02 percentage points more than a two-year Treasury. When that difference goes negative, investors see it as a warning signal that a recession may be coming. And the gap is now close to its lowest level since the summer of 2007, about six months before the Great Recession struck.

Stock markets overseas turned higher following the U.S. and Chinese announcements on trade. The French CAC 40 jumped 1% after being down for most of the day. The German DAX rose 0.6%, and the FTSE 100 in London added 0.3%.

Asian markets had already closed before the announcements, and Japan's Nikkei 225 index dropped 1.1%. The Hang Seng lost 2.1% in Hong Kong, where pro-democracy protests crippled Hong Kong's airport for a second day. The Chinese government cast an ominous shadow over the growing protests by calling them "sprouts of terrorism" and raised concerns over how it may respond.

Commodities prices also surged on expectations that easing U.S.-China trade tensions could lead to healthier demand. Benchmark U.S. crude rose $2.17, or 4%, to $57.10 per barrel. Brent crude, the international standard, gained $2.73 to $61.30. Copper rose 4 cents, or 2%, to $2.62 a pound.

Gold dipped $3.10 to $1,502.20 per ounce and silver fell 8 cents to $16.96 per ounce.

The dollar rose to 106.68 Japanese yen from 105.27 yen on Monday. The euro weakened to $1.1174 from $1.1219.

___

AP Business Writers Damian J. Troise and Anne D'Innocenzio contributed to this report.

  • Associated Categories: Associated Press (AP), AP National News, AP Online National News, AP Business, AP Business - Economy, AP Business - Financial Markets
© Copyright 2019 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
Malaysia police: Family confirms body as missing London teen
Malaysian police say the family of a missing 15-year-old London girl has positively identified a naked body found near the nature resort where she disappeared over a week ago
10:45AM ( 7 minutes ago )
Pew survey: 60% in US hold dim view of China amid trade war
Pew survey results: 60% of Americans hold dim view of China amid intensified trade war
10:42AM ( 10 minutes ago )
US delays tariffs on some Chinese goods, drops others
US delays tariffs on cellphones, other Chinese goods, drops others altogether; stocks rally
10:41AM ( 10 minutes ago )
Associated Press (AP)
Malaysia finds body believed to be missing London teen
Malaysian police say rescuers have found the naked body of a Caucasian female believed to be that of a 15-year-old London girl who was reported missing more than a week ago
9:21AM ( 1 hour ago )
CNN backs Chris Cuomo after caught-on-video confrontation
CNN says it completely supports anchor Chris Cuomo after video surfaced of him threatening to push a man down some stairs during a confrontation after the man apparently called him "Fredo," in a seeming reference to the "Godfather" movies
9:01AM ( 1 hour ago )
Epstein death shifts federal focus to possible conspirators
Federal prosecutors are turning their attention to possible criminal charges against anyone who conspired with the wealthy financier Jeffrey Epstein in his alleged sexual abuse
8:57AM ( 1 hour ago )
AP National News
Malaysia finds body near where London teen went missing
Malaysian police say rescuers have found the body of a Caucasian female in the forest surrounding a nature resort where a 15-year-old London girl was reported missing more than a week ago
5:20AM ( 5 hours ago )
Dayton gunman's friend due in court on gun-related charge
Authorities say they know who helped the Dayton gunman buy the body armor and assemble the weapon used in last week's mass shooting
4:33AM ( 6 hours ago )
Protesters clog Hong Kong airport again after it reopens
Some flights started taking off again from Hong Kong's airport, though more than 100 remained cancelled a day after pro-democracy protesters forced one of the world's busiest transport hubs to shut down
4:20AM ( 6 hours ago )
AP Online National News
Bolton's UK trade-deal promise leaves questions unanswered
British Prime Minister Boris Johnson says getting a free trade deal with the United States will be "a tough old haggle," after U.S. National Security Adviser John Bolton promised the U.K. quick sector-by-sector trade deals after Brexit
10:06AM ( 46 minutes ago )
US consumer prices rose 0.3% amid widespread cost increases
US consumer prices rise 0.3% in July, lifted by more expensive gas, medical care and housing
8:33AM ( 2 hours ago )
Indonesian firm cancels Chinese loan for its Trump project
U.S. President Donald Trump's son and his Indonesian business partner say a theme park that also features a Trump hotel and condos will no longer have Chinese financing
8:05AM ( 2 hours ago )
AP Business
German investor confidence sags over trade conflict, Brexit
An indicator of investors' view of the German economy fell to its lowest since December 2011 amid concerns about the U.S.-China trade conflict, the chance of a disorderly Brexit and a possible competition among countries to devalue their currencies
6:18AM ( 4 hours ago )
Global stocks follow Wall Street lower on trade war jitters
Global stocks follow Wall Street lower amid anxiety U.S.-Chinese trade war will cut global growth
4:48AM ( 6 hours ago )
Not just Bali: Indonesia hopes to develop more tourism sites
In his second term, Indonesia's president hopes to find foreign investors for '10 new Balis' to boost tourism and diversify Southeast Asia's largest economy
11:35PM ( 11 hours ago )
AP Business - Economy
Argentina's Macri bashed as voters back predecessor's ticket
Facing widespread discontent over austerity measures and low growth, Argentine President Mauricio Macri has been snubbed by voters who appear to have given a resounding primary victory to a ticket with his predecessor, Cristina Fernández
11:00AM ( 23 hours ago )
Global shares decline as trade war worries worsen
Global shares tumble as worries about the U.S.-China trade war worsen
7:40AM ( 1 day ago )
Global stocks mixed as trade war worries worsen
Global stocks mixed as worries about the U.S.-China trade war worsen
5:15AM ( 1 day ago )
AP Business - Financial Markets
Malaysia police: Family confirms body as missing London teen
Malaysian police say the family of a missing 15-year-old London girl has positively identified a naked body found near the nature resort where she disappeared over a week ago
10:45AM ( 7 minutes ago )
Pew survey: 60% in US hold dim view of China amid trade war
Pew survey results: 60% of Americans hold dim view of China amid intensified trade war
10:42AM ( 10 minutes ago )
US delays tariffs on some Chinese goods, drops others
US delays tariffs on cellphones, other Chinese goods, drops others altogether; stocks rally
10:41AM ( 11 minutes ago )
Fast, not so furious? Europe wrestles with electric scooters
From Paris to Berlin, European cities are searching for solutions to the two-wheeled phenomenon that's fast transforming cityscapes worldwide: electric scooters
10:40AM ( 12 minutes ago )
Indian-controlled Kashmir under strict lockdown for 9th day
An unprecedented security lockdown is keeping people in Indian-administered Kashmir indoors for a ninth day
10:33AM ( 18 minutes ago )