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Wall Street bounces as trade temperature cools

Stock MarketsAug 26, 2019 04:19PM ET
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© Reuters. Traders work on the trading floor at the New York Stock Exchange (NYSE) at the opening of the market in New York City

By Chuck Mikolajczak

NEW YORK (Reuters) - U.S. stocks rose on Monday, following a sharp sell-off in the prior session, after U.S. President Donald Trump predicted a trade deal with China, cooling investor concerns after a ramp-up in rhetoric derailed markets last week.

Following the G7 summit of world leaders in Biarritz, France, Trump said 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. Apple Inc's (O:AAPL) 1.90% gain provided the biggest boost to each of the major indexes.

Chipmakers, which are heavily reliant upon China for revenue, also rose. The Philadelphia Semiconductor index (SOX) added 0.86% after slumping more than 4% on Friday.

Still, market participants said the rebound paled in comparison to last week's decline, and they expected recent volatility to continue.

"The markets are telling us something very important with this pricing action today. We are seeing some gains across the board for the Nasdaq S&P and Dow, but we are also seeing a very significant downtick in volume," said Peter Kenny, founder of Kenny’s Commentary LLC and Strategic Board Solutions LLC in New York.

"This is not a healthy bounce and it is across virtually all the major indexes. So it is an indication the momentum for U.S. equities remains biased to the downside," Kenny said.

The Dow Jones Industrial Average (DJI) rose 269.93 points, or 1.05%, to 25,898.83, the S&P 500 (SPX) gained 31.27 points, or 1.10%, to 2,878.38, and the Nasdaq Composite (IXIC) added 101.97 points, or 1.32%, to 7,853.74.

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 data could provide the Federal Reserve with more fuel to cut interest rates again when policymakers meet 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 off more than 5% from the record high hit in late July after suffering its longest run of weekly declines since May.

Even with Monday's broad gains, with each of the major S&P 500 sectors rising, Wall Street's fear gauge, the CBOE Volatility index (VIX), hit its highest level in more than a week earlier in the session.

Among other stocks, Celgene Corp (O:CELG) rose 3.20% after Amgen Inc (O:AMGN) said it would buy the company's psoriasis drug Otezla, clearing the way for Bristol-Myers Squibb Co (N:BMY) to go ahead with its $74 billion deal for Celgene. Shares of Bristol-Myers rose 3.28%

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.

About 5.71 billion shares changed hands in U.S. exchanges, compared with the 7.57 billion daily average over the last 20 sessions.

Wall Street bounces as trade temperature cools
 

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Comments (20)
Thunderfury Pally
Thunderfury Pally Aug 26, 2019 4:45PM ET
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we all played by trump again
Max German
MaxiGE Aug 26, 2019 3:02PM ET
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correction: wall street bounce on lies
Mary Kinney
Mary Kinney Aug 26, 2019 1:29PM ET
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softer only for a moment... Trump is damaged goods I'm out until the DEAL is official and signed. so done with the lies.
DOZI Star
DOZI Star Aug 26, 2019 1:29PM ET
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Ur smart
Notvery Goodathis
Peteymcletey Aug 26, 2019 1:10PM ET
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What actually changed? Tariffs removed, or more nothing? Thought so.
Tumelo Mash
Tumelo Mash Aug 26, 2019 1:00PM ET
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Watch the market fall next week when tariffs start to really hurt the economies
Bruce Gan
Bruce Gan Aug 26, 2019 12:25PM ET
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Trump should be investigated if he and his associates benefit from the market volatility whenever he tweets
Boris Chan
Boris Chan Aug 26, 2019 12:25PM ET
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recall that last time the market started going downhill at 1pm while his speech was made at 1:30pm
Jack Zhang
Jack_A Aug 26, 2019 12:24PM ET
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trying to make a deal? or just to manipulate the market? a twitter is worth billions $$
Smith Yonsen
Smith Yonsen Aug 26, 2019 11:54AM ET
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Pray for HongKong, prepare beer for show tiananmen2
mike tyson
mike tyson Aug 26, 2019 11:38AM ET
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president trump says that china is willing to restart the trade talk is a good news for the market.
brad merck
brad merck Aug 26, 2019 11:38AM ET
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lol
Bill Chan
Bill Chan Aug 26, 2019 11:00AM ET
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listen me, short Dow Jones… before end close position take profit
Jack Drummond
Jack Drummond Aug 26, 2019 10:34AM ET
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SB20, thx. I figure that he learned how to generate money in this new way, and help cushion him breaking the habit of being a serial money launderer.
Hank Williams
Hank Williams Aug 26, 2019 10:22AM ET
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Sounds like we are trying to sell the Chinese a piece of real estate. Sounds just like a realtor.
Kshyamanidhi Mahabhoi
Kshyamanidhi Mahabhoi Aug 26, 2019 10:07AM ET
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This mad dog should be kicked out of politics.
Jack Drummond
Jack Drummond Aug 26, 2019 9:59AM ET
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well, CNN finally came right out and said it.r.r.Trump is manipulating the market by alternating between hopeful and disappointing outlooks about (In this case, China trade war) to the advantage of his cadre of insider traders.r.r.I've been saying so all along.r.r.Too bad the market movers are more than happy to change polarity as long as it generates commissions.r.r.Gold traders are riding quite a wave.r.r.What'a time to buy physical gold.r.r.It's clear that Trump has been doing this, nearly, since inauguration.
Erski Gumby
SB20 Aug 26, 2019 9:59AM ET
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Exactly my thoughts since last year. Follow the money.
JOHN SMITH
JOHN SMITH Aug 26, 2019 8:50AM ET
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A psychotic liar fabricating phone calls and the market eats it up as true. This market will crash hard.
JOHN SMITH
JOHN SMITH Aug 26, 2019 8:48AM ET
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crazy
inderjeet virk
inderjeet virk Aug 26, 2019 8:47AM ET
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his tough stance did not last even two days
JOHN SMITH
JOHN SMITH Aug 26, 2019 8:47AM ET
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In the absence of a moral compass all you are left with is a bag of rotting orange gas.
Zb Zb
Zbzb Aug 26, 2019 8:47AM ET
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ahmad sudin
ahmad sudin Aug 26, 2019 8:47AM ET
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at his age it wont last for two minutes...   haha
Sharon Harr
Sharon Harr Aug 26, 2019 8:27AM ET
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Spy is upGdX is up
brad merck
brad merck Aug 26, 2019 8:22AM ET
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trump is better than pinocchio  !!!,  S&P down and gold 1600
Jenia Golbstein
Jenia Golbstein Aug 26, 2019 8:16AM ET
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if 0.4% is a recovery then I'm Donald Trump
joseph win
jwin Aug 26, 2019 8:16AM ET
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He didnt ease. He lied, now making things up and being a trick and backing down
 
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