NEW YORK (Reuters) – Wall Street advanced on Thursday, and the S&P 500 hovered a hair’s breadth below its all-time high, buoyed by positive developments on the U.S.-China trade front and a promise of continued stimulus from the European Central Bank.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 9, 2019. REUTERS/Brendan McDermid
Gains in technology shares helped push all three major U.S. stock indexes into the black. The Dow was on track for its seventh straight session of gains, its longest winning streak since May.
Stocks rose worldwide as China and the United States made conciliatory gestures ahead of next month’s planned talks in Washington, aimed at easing a trade war that has whipsawed markets and stoked recessionary fears for months.
President Donald Trump agreed to delay increased tariffs on billions worth of Chinese goods for two weeks after China exempted tariffs on a basket of U.S. imports and promised to buy more U.S. agricultural products.
“Markets are still on the trade war seesaw today,” said David Carter, chief investment officer at Lenox Wealth Advisors in New York. “We had some good news on trade which is why markets are up, but the seesaw may drop on any signs of failure.”
Investor confidence got an early boost from the European Central Bank (ECB), which promised continued stimulus to the ailing euro zone economy through asset purchases.
Carter, however, expressed skepticism about the potential benefits of additional stimulus.
“At this stage of the cycle we’re not sure if further ECB or Fed easing will have a meaningful fundamental impact given that rates have been so low for so long,” Carter said.
The U.S. Federal Reserve is expected to cut key interest rates by 25 basis points at its upcoming monetary policy meeting next week, a move intended to head off signs of U.S. economic softening.
Such softening was not apparent in economic data released by the Labor Department on Thursday. Core consumer prices rose 2.4% in August, well above the Fed’s 2% inflation target, and jobless claims dropped last week more than economists expected.
The Dow Jones Industrial Average .DJI rose 130.34 points, or 0.48%, to 27,267.38, the S&P 500 .SPX gained 15.4 points, or 0.51%, to 3,016.33 and the Nasdaq Composite .IXIC added 44.43 points, or 0.54%, to 8,214.11.
Of the 11 major sectors in the S&P 500, all but energy .SPNY were in positive territory, with technology .SPLRCT and consumer discretionary .SPLRCD enjoying the largest percentage gains.
Industrial bellwethers Deere & Co (DE.N) and Caterpillar Inc (CAT.N) were down 1.3% and 1.1%, respectively, after Wells Fargo downgraded their shares to “market perform.”
Google parent Alphabet Inc (GOOGL.O) shares rose 1.5% after Google reached a $1.1 billon settlement with French authorities to resolve a fiscal fraud probe, and following a legal victory over German publishers over fee demands.
Shares of Tocagen Inc (TOCA.O) plunged 78.9% after the drugmaker’s experimental brain cancer treatment failed in a late-stage study.
Advancing issues outnumbered declining ones on the NYSE by a 1.18-to-1 ratio; on Nasdaq, a 1.05-to-1 ratio favored advancers.
The S&P 500 posted 39 new 52-week highs and one new low; the Nasdaq Composite recorded 81 new highs and 20 new lows.
Reporting by Stephen Culp; Editing by Leslie Adler