Stocks rise as Trump indicates trade deal could be near
NEW YORK (AP) — U.S. stocks moved higher in midday trading Wednesday after President Donald Trump indicated a trade deal with China could happen soon.
Strong gains from banks and industrial companies helped brush off an early decline in stocks.
Speaking to reporters at the United Nations, Trump said a deal with China "could happen sooner than you think," though he did not elaborate. Talks between top-level trade officials are expected to take place next month.
Bank of America rose 1.2 % and Citigroup rose 1.5% and helped lift the financial sector as bond yields ticked higher. The yield on the 10-year Treasury rose to 1.69% from 1.63% late Tuesday. The higher yields help banks charge more lucrative interest rates on loans.
Industrial stocks also helped lift the market out of an early malaise. Boeing rose 2.2% as investors applauded the company's move to form a new safety committee as it deals with the legal and financial fallout from several deadly crashes. Uniform company Cintas rose 4.6% after it reported a surprisingly good fiscal first quarter profit and raised its forecast for profits and revenue.
Technology companies made a comeback after dragging the market lower in the early going. Chipmakers Nvidia and Qualcomm both made strong gains.
Nike jumped after a stellar earnings report and helped lift consumer-oriented companies. Tobacco company Philip Morris rose after calling off merger discussions with fellow tobacco giant Altria.
The swing in trading follows a volatile session on Tuesday as investors digested a weak consumer confidence report, more trade war rhetoric and the start of an impeachment inquiry into President Trump.
KEEPING SCORE: The S&P 500 index rose 0.3% as of 11:45 a.m. Eastern time. The Dow Jones Industrial Average rose 138 points, or 0.5%, to 26,941. The Nasdaq rose 0.3%.
OVERSEAS: Stocks in Europe and Asia broadly fell. Britain's parliament and Prime Minister Boris Johnson are set to clash Wednesday over the nation's likely chaotic exit from the European Union. Britain is leaving the trading block on Oct. 31 and has yet to strike a deal with European nations covering trade and other issues.
Indexes in China slumped after Trump claimed in a speech Tuesday that China gets preferential treatment from the World Trade Organization. The rhetoric comes ahead of trade negotiations planned for October. Previous hopes for a resolution to the ongoing feud have been dashed because tensions flared over similar comments.
IMPEACHMENT PRESSURE: Investors retreated and sent the broader market to its worst day of the month on Tuesday as rumblings about an impeachment inquiry into President Donald Trump grew. The congressional inquiry could impact efforts to settle the U.S. and China trade dispute, which has been weighing down global economic growth.
"The optimistic view is that Trump will become more conciliatory in order to counter a possible drop in his approval rating during an impeachment process," wrote John Normand, head of cross-asset fundamental strategy at J.P. Morgan, in a note to investors. "The pessimistic view is that other countries will compound the President's domestic challenges with international ones in hopes of scuppering his re-election bid."
UP IN SMOKE: Altria fell slightly and Philip Morris rose 6.9% after the tobacco giants called offer merger talks. Altria has exclusively sold Marlboro cigarettes and other tobacco brands in the U.S., while Philip Morris has handled international sales. The companies had been in discussions to combine more than a decade after splitting.
NICE SWOOSH: Nike rose 5.2% after the footwear and athletic apparel maker handily beat fiscal first quarter profit forecasts. The company had a surprisingly strong 27% rise in revenue from China, despite the ongoing trade war with the U.S. Nike and other footwear companies could face lower sales and higher costs because of tariffs and supply chain issues.