Stocks march higher as investors head to 3Q finish line
NEW YORK (AP) — Stocks marched higher in afternoon trading Monday as investors moved closer to wrapping up a highly volatile quarter in which the market was buffeted by swings in the U.S.-China trade war.
Technology stocks led the gains. Apple rose 1.9%. Product and chipmakers have been among the most sensitive to developments in the trade dispute. Many of the companies in that sector rely on China for sales or parts.
Merck rose 1.8% and did much of the heavy lifting for health care stocks. Medical device a drug maker Abbott Laboratories rose 2.5%.
Makers of consumer products and consumer-oriented companies also made broad gains.
Banks wobbled between small gains and losses while energy companies slid along with declining oil prices. Marathon Petroleum fell 2.1% and Occidental fell 1.4%.
Bond prices fell. The yield on the 10-year Treasury rose to 1.68% from 1.67% late Friday.
Trade tensions seemed to ease a bit. China said its top negotiator will lead a 13th round of talks aimed at resolving the trade war with the U.S. The negotiations are expected to take place after Oct. 7.
The reassuring news follows a report Friday that the U.S. might seek to escalate the feud again by considering ways to limit U.S. investments in China. The Treasury Department, though, said there weren't currently plans to block Chinese companies from listing shares on U.S. stock exchanges.
KEEPING SCORE: The S&P 500 index rose 0.7% as of 1:20 p.m. Eastern time. The Dow Jones Industrial Average rose 156 points, or 0.6%, to 26,977. The Nasdaq rose 0.8%.
OVERSEAS: Stocks in Europe moved broadly higher. Unemployment in the 19 countries that use the euro fell in August to its lowest rate since May 2008, according to the European Union's statistics agency. Germany, Europe's biggest economy, separately reported a drop in its unemployment rate.
Asian markets were mixed. Chinese manufacturing improved in September, even as demand for Chinese goods has been hurt by slower economic growth and the trade feud with the U.S.
CHOPPY QUARTER: The trade war put a damper on the market again during the third quarter. The U.S. and China again escalated their trade war in August, blunting gains for every major U.S. index. Stocks started climbing again in September as both sides made conciliatory moves to ease tensions ahead of another round of planned talks in October.
The S&P 500 and the Dow are both on track for quarterly gains of more than 1%. The technology-heavy Nasdaq never fully recovered from the August hit and is wobbling between small gains and losses.
Small companies bore the brunt of the trade war damage during the quarter. The Russell 2000 is on track for a 3% loss.
ANALYST'S TAKE: Investors are putting a frustrating quarter behind them and gearing up for what could be another tough period. The trade war and Britain's exit from the European Union will loom over the market. The impeachment inquiry into President Donald Trump also has the potential to crimp the market's gains.
"The consumer's been enough to keep the economy moving, but things like consumer confidence seem to be plateauing," said Emily Roland, co-chief investment strategist at John Hancock Investment Management.
The latest earnings results from companies in the next few weeks will give investors a better picture of the economy's potential direction. "We need that earnings engine to kick in to drive markets higher," Roland said.
HOME STRETCH AHEAD: Investors are heading into the final quarter of 2019 with the trade war hanging over the market and corporate financial results on the way in mid-October.
The next round of trade negotiations could be the key to heading off another round of destructive tariffs in December. Both sides have postponed some of the more worrisome tariff increases, which would more directly raise prices on consumer goods and potentially crimp consumer spending.
Investors will soon get a better glimpse of the trade war's impact with the next round of corporate financial results later this month. Analysts are forecasting that profits will contract by more than 3%, according to FactSet.
Last year, the market slumped 14% in the fourth quarter as investors became rattled over a slowdown in economic growth and the Federal Reserve's plans to keep raising interest rates. This time around, the Federal Reserve has shifted gears by cutting interest rates in an effort to help shore up economic growth. The central bank has signaled that it is ready to take additional measures, if necessary, to offset the damage being done by the trade war.
PROFIT HAMMER: Thor Industries surged 17% after the maker of Airstream recreational vehicles beat Wall Street's fiscal fourth quarter profit forecasts.
EGGED RESULTS: Egg producer Cal-Maine fell 10.8% after the company said too many eggs on the market battered its first quarter financial results. The oversupply significantly lowered the price of eggs and cut into the company's revenue. It recorded a surprisingly large loss.