- Title: Wall Street bounces on softer trade tone
- Date: 26th August 2019
- Summary: NEW YORK, NEW YORK, UNITED STATES (AUGUST 26, 2019) (REUTERS) (SOUNDBITE) (English) PORTFOLIO MANAGER AMZA & PFFA, JAY HATFIELD, SAYING: "I think it's critical to look at the seven past inversions we've had since World War II. In those cases the average 10-year Treasury was at 7.5 percent. And what had happened is the Federal Reserve had rapidly raised short-term rates that had driven up long-term rates and that precipitated a credit crunch both in housing and corporate investment. Whereas now we actually have the reverse where we have almost all-time low 10-year Treasury rates which is spurring refinancing in housing. And we believe there's going to be a lot of corporate issues, particularly investment grade post Labor Day. So it's actually improving the prospects or in the cost of capital for corporations. So we don't see given that through polar opposite situation from prior inversions, the likelihood of recession being high at all right now."
- Embargoed: 9th September 2019 21:38
- Keywords: Jay Hatfield U.S. stocks NYSE Dow Jones S&P trade deal China
- Location: NEW YORK, NEW YORK, UNITED STATES
- City: NEW YORK, NEW YORK, UNITED STATES
- Country: USA
- Topics: Economic Events
- Reuters ID: LVA004ATUWPSD
- Aspect Ratio: 16:9
- Story Text: U.S. stocks rose on Monday (August 26), as major indexes bounced following a sharp sell-off in the prior session, as U.S. President Donald Trump forecast a trade deal with China and somewhat cooled investor concerns after a ramp up in combativeness derailed markets last week.
Trump said after a G7 summit of world leaders in Biarritz, France, that he believed China was sincere about the desire to reach a deal, citing what he described as increasing economic pressure on Beijing and job losses there.
Shares of tariff-sensitive companies rose in response, with Apple Inc's 1.40% gain providing the biggest boost to each of the major indexes.
Chipmakers, which are heavily reliant upon China for revenue, also rose with the Philadelphia Semiconductor index adding 0.66% after dropping more than 4% on Friday.
Still, market participants noted the rebound was less dramatic than the drop in markets last week, and they expected recent volatility to continue.
The Dow Jones Industrial Average rose 144.97 points, or 0.57%, to 25,773.87, the S&P 500 gained 17.34 points, or 0.61%, to 2,864.45 and the Nasdaq Composite added 65.86 points, or 0.85%, to 7,817.63.
Commerce Department data showed new orders for key U.S.-made capital goods rose modestly in July, while shipments fell by the most in nearly three years. The report which could provide the Federal Reserve with more fuel to cut interest rates again next month.
Concerns about the global economy slipping into recession and uncertainty over the pace of U.S. interest rate cuts have created some anxiety about how long the current U.S. expansion will last. The S&P 500 is now off more than 5% from its record high hit in late July after suffering its longest run of weekly declines since May.
Even with broad gains on Monday that saw all 11 S&P 500 sectors rise, Wall Street's fear gauge, the CBOE Volatility index, hit its highest level in more than a week earlier in the session.
Among other stocks, Celgene Corp rose 2.70% after Amgen Inc said it would buy the company's psoriasis drug Otezla, clearing the way for Bristol-Myers Squibb Co to go ahead with its $74 billion deal for Celgene. Shares of Bristol-Myers rose 2.71%
Advancing issues outnumbered declining ones on the NYSE by a 1.66-to-1 ratio; on Nasdaq, a 1.74-to-1 ratio favored advancers.
The S&P 500 posted four new 52-week highs and 17 new lows; the Nasdaq Composite recorded 17 new highs and 134 new lows.
(Production by: Dan Fastenberg) - Copyright Holder: REUTERS
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