(Reuters) – Wall Street rose on Wednesday, boosted by Apple Inc after the launch of its latest iPhones, while investor nerves were also soothed by China’s move to ease trade tensions with the United States.
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
The gains took Apple’s market valuation above $1 trillion and lifted the wider technology sector .SPLRCT by 0.78%, the biggest boost among the 11 major S&P 500 sectors.
Tech stocks bounced from a drop in the previous session, which saw investors moving to more value-oriented stocks from growth shares.
Phil Orlando, chief equity market strategist at Federated Investors, said he believed investors will likely continue to move money into sectors like financials and energy, as well as small cap stocks, which have all underperformed this year.
Adding to the positive momentum, China’s finance ministry moved to exempt 16 types of U.S. goods, including lubricants and some animal feed ingredients, from additional retaliatory tariffs, ahead of a planned meeting between trade negotiators.
While on the surface, the move is seen as a friendly gesture to thaw relations with the United States, analysts are skeptical about how much it will move the needle in resolving a protracted trade war that has hurt the global economy.
The nature of the goods that are being exempted are staples and indicates that China’s decision is likely more to do with supporting its own economy rather than extending an olive branch to the United States, Ed Egilinsky, head of alternative investments at Direxion said.
“There’s a big difference between today’s move and sitting down at the negotiating table and actually ironing out a deal.”
Comments from a senior White House adviser on Tuesday urging investors to be patient about resolving the dispute further downplayed expectations that a trade deal would be agreed this year.
Investors held out on big bets ahead of stimulus decisions from central banks to stem a global slowdown in economic growth. The U.S. Federal Reserve and the European Central Bank are expected to cut interest rates at their policy meetings over the next two weeks.
U.S. President Donald Trump on Wednesday renewed his attacks on Fed Chairman Jerome Powell, saying that the central bank should get interest rates down to “ZERO, or less”.
While the domestic economy is well insulated from uncertainties like Brexit that are dragging on European markets, U.S. investors will react negatively on Thursday in the event that the ECB puts out a more hawkish policy decision than expected, Orlando said.
At 1:05 p.m. ET, the Dow Jones Industrial Average .DJI was up 105.55 points, or 0.39%, at 27,014.98, the S&P 500 .SPX was up 14.57 points, or 0.49%, at 2,993.96 and the Nasdaq Composite .IXIC was up 70.16 points, or 0.87%, at 8,154.31.
Shares of Micron Technology Inc (MU.O) rose 1.8% after Longbow Research upgraded its stock to “buy”.
Advancing issues outnumbered decliners for a 2.11-to-1 ratio on the NYSE and a 2.58-to-1 ratio on the Nasdaq.
The S&P index recorded 22 new 52-week highs and no new low, while the Nasdaq recorded 45 new highs and 11 new lows.
Reporting by Uday Sampath in Bengaluru; Editing by Saumyadeb Chakrabarty, Arun Koyyur and Shounak Dasgupta