U.S. Stocks Rally on Tariff Delay -- Update
13 Agosto 2019 - 3:53PM
Noticias Dow Jones
By Gunjan Banerji
Stocks, bond yields and commodities jumped Tuesday as news that
the U.S. would delay some tariffs against China rekindled
investors' hopes for an eventual trade truce.
The Trump administration announced it plans to delay and remove
items from the roughly $300 billion of Chinese imports facing
tariffs on Sept. 1. The development sent investors rushing back
into stocks after an extended bout of market volatility and two
days of declines for major U.S. indexes. Investors also piled into
commodities, while shedding exposure to assets considered
relatively safer such as government bonds and gold.
The S&P 500 advanced 1.5%, led higher by shares of
technology companies. The Dow Jones Industrial Average jumped more
than 400 points before paring some of its gains to rise 382 points,
or 1.5%. The Nasdaq Composite gained nearly 2%.
Tuesday's rally showed that despite lingering fears about
slowing global growth and a possible recession, investors remain
preoccupied with trade talks. Developments on trade between U.S.
and China can stoke big declines in the U.S. stock market and also
spur stock rallies and moves in the metals and commodities
markets.
The move by the Trump administration also assuaged some fears
about a potential currency battle between two of the largest global
economies. After President Trump decided to extend punitive tariffs
on almost all Chinese goods, China's currency fell against the
dollar, prompting the U.S. to accuse Beijing of manipulating its
currency. The moves spurred a week of turbulence that rippled
through stock, bond and currency markets.
Among individual stocks that have been sensitive to trade talks,
Caterpillar shares jumped 2% and Apple added 4.2%. Shares of
department stores, discount chains and toy makers notched big gains
as well. Best Buy shares added 6.5%.
Shares of technology companies outperformed as smartphones,
laptop computers and toys are among the categories benefitting from
the tariff reprieve. The S&P 500's information-technology
sector advanced about 2.5%, making it the best performing of the
S&P's 11 sectors.
Shares of Micron Technology added 4.8%.
Optimism about trade also rippled through commodities markets.
Copper rose after slumping in recent weeks on trade tensions. Brent
crude oil gained 4.7%, its biggest one-day gain since December.
"In the very short term, this takes a little bit of pressure
off," Mike Bailey, director of research at FBB Capital Partners,
said of the trade news.
Investors' sale of traditionally safer assets like government
bonds early Tuesday sent yields higher. The yield on the 10-year
Treasury note rose to 1.678% from 1.640% Monday. Government bond
yields around the world had fallen before the tariff news in early
trading Tuesday, with the yield on the 30-year Treasury on track to
settle at a record low before it started inching higher later in
the day.
The yield on the German 10-year bund fell to minus 0.617%, a
record intraday low, after a key survey of business expectations
showed a sharp drop in sentiment.
Gold lost 0.2% Tuesday but remains near some of its highest
levels of the year.
Trade tensions between the U.S. and China have rattled markets
in recent days, injecting volatility into stock, bond and currency
markets. Some analysts said they are expecting more short-term
swings, wary that large one-day moves could be quickly reversed in
coming days.
"We wouldn't recommend investors making large positions one way
or another on equities" at the moment, said Jason Draho, head of
Americas asset allocation at UBS Global Wealth Management.
In Europe, the benchmark Europe Stoxx 600 index erased its
earlier losses to rise about 0.5%.
Elsewhere, the selloff in Hong Kong stocks accelerated, with the
Hang Seng Index falling 2.1% amid continued political unrest. This
week's selloff in Hong Kong stocks meant the Hang Seng Index --
which has lost 11% since the beginning of July, when the protests
turned more violent -- has joined Korea's Kospi as the second major
global benchmark in negative territory this year.
"In the near-term it is a positive," said Parag Thatte, a
strategist at Deutsche Bank AG. But, "uncertainty being caused by
the trade war" remains.
Steven Russolillo and
Anna Isaac
contributed to this article.
Write to Gunjan Banerji at Gunjan.Banerji@wsj.com
(END) Dow Jones Newswires
August 13, 2019 16:38 ET (20:38 GMT)
Copyright (c) 2019 Dow Jones & Company, Inc.