Stocks Rally On Report Of Trade Concessions By Europe – U.S. Commentary
Stocks showed a strong move to the upside during trading on Wednesday, as traders reacted positively to a report about President Donald Trump securing concessions from Europe.
The major averages climbed to new highs for the session going into the close of trading. The Dow rose 172.16 points or 0.7 percent to 25,414.10, the Nasdaq jumped 91.47 points or 1.2 percent to 7,932.24 and the S&P 500 advanced 25.67 points or 0.9 percent to 2,846.07.
The strength on Wall Street came after a report from the Wall Street Journal said the European Union delegation meeting with Trump agreed to consider changes in its trade policies in an effort to ease relations with the U.S.
Citing a European official, the journal said European Commission President Jean-Claude Juncker and his top trade official Cecilia Malmström agreed to work with the U.S. administration to lower industrial tariffs on both sides, increase LNG exports and soy beans to Europe, and align regulatory standards to allow for medical devices to have better market access in Europe.
The report offset earlier negative sentiment generated by disappointing guidance from General Motors (GM) and Boeing (BA).
GM reported better than expected second quarter results but lowered its full-year earnings forecast due to rising steel and aluminum costs as a result of the tariffs imposed by President Donald Trump’s administration.
Aerospace giant Boeing also reported second quarter results that exceeded analyst estimates but warned of lower than expected margins for its defense business in 2018.
On the U.S. economic front, the Commerce Department released a report showing a bigger than expected pullback in new home sales in the month of June.
The report said new home sales plunged by 5.3 percent to an annual rate of 631,000 in June after jumping by 3.9 percent to a rate of 666,000 in May. Economists had expected new home sales to fall by 2.8 percent.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Wednesday. Japan’s Nikkei 225 Index rose by 0.5 percent, while China’s Shanghai Composite Index edged down by less than a tenth of a percent.
Meanwhile, the major European markets all moved to the downside on the day. While the French CAC 40 Index dipped by 0.1 percent, the U.K.’s FTSE 100 Index and the German DAX Index fell by 0.7 percent and 0.9 percent, respectively.
In the bond market, treasuries closed modestly higher after showing a lack of direction for much of the session. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, fell by 1.3 basis points to 2.936 percent.
Looking ahead, Advanced Micro Devices (AMD), Facebook (FB), Ford (F), Mattel (MAT), PayPal (PYPL) and Visa (V) are among the companies releasing their quarterly results after the close of today’s trading.
Altria (MO), Bristol-Myers (BMY), ConocoPhillips (COP), Dunkin Brands (DNKN), Hershey Foods (HSY), MasterCard (MA), McDonald’s (MCD), Nokia (NOK), Southwest (LUV) and Xerox (XRX) are also among the companies due to report their results before the start of trading on Thursday.
by RTTNews Staff Writer
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