Make Kitco Your Homepage

Wall Street extends rally, elevated by Apple and chipmakers

Kitco News

(Reuters) - Wall Street extended a rally into a fourth session on Wednesday, led by Apple, chipmakers and other trade-sensitive stocks after signs of progress in trade talks between the United States and China. The benchmark S&P 500 .SPX is up about 10 percent from a 20-month low it touched around Christmas, boosted by hopes for a deal between the world's two largest economies, which eased some worries over the impact of the trade spat on global growth. Market participants were also encouraged by strong U.S. jobs data and indications the Federal Reserve is in no rush to raise interest rates.

China pledged to purchase “a substantial amount” of agricultural, energy and manufactured goods and services from the United States, the U.S. Trade Representative’s office said, as talks wrapped up in Beijing.

The S&P technology index .SPLRCT rose 1.54 percent, leading other sectors.

Apple Inc (AAPL.O) added 2.16 percent despite a Nikkei report that the company had reduced planned production for its three new iPhone models for the January-March quarter.

The company’s shares tumbled about 10 percent last week after it warned on holiday quarter sales and its suppliers, which largely include chipmakers, took another beating on Tuesday after Samsung Electronics (005930.KS) flagged weak chip demand.

The Philadelphia Semiconductor index .SOX gained 2.66 percent. Chipmakers are among the U.S. multinationals with the highest revenue exposure to China.

“If you want to gauge how investors are viewing the trade talks, just walk tech, and semiconductors in particular,” said Jack Ablin, chief investment officer at Cresset Wealth Advisors in Chicago.

Shares of Boeing Co (BA.N), which also has a large exposure to China, climbed 1.32 percent, with the S&P industrial index .SPLRCI gaining 0.99 percent.

The CBOE Volatility index .VIX, often referred to as an investor fear gauge, dropped half-a-point to a one-month low of 20.04.

The Dow Jones Industrial Average .DJI was up 0.63 percent at 23,937.43 points, while the S&P 500 .SPX gained 0.61 percent to 2,590.11.

The Nasdaq Composite .IXIC added 1.08 percent to 6,971.70.

Financial stocks .SPSY rose 0.64 percent.

Several Fed policymakers said they could wait on any further interest rate hikes until they had a better handle on whether growing risks will undercut an otherwise solid U.S. economic outlook.

“A more stable Fed is going to lead to more stable markets over time,” said Mark Heppenstall, chief investment officer at Penn Mutual Asset Management in Horsham, Pennsylvania.

“Some of the sharp moves in the market were driven by the fact that Fed tightening is starting to have an impact on economic growth and financial conditions.”

Shares in Constellation Brands Inc (STZ.N) sank 10 percent, dragging down the consumer staples index .SPLRCS, after the Corona brewer cut its fiscal 2019 profit outlook.

Advancing issues outnumbered declining ones on the NYSE by a 2.21-to-1 ratio; on Nasdaq, a 1.85-to-1 ratio favored advancers.

The S&P 500 posted no new 52-week highs and 1 new low; the Nasdaq Composite recorded 22 new highs and 5 new lows.

Additional reporting by Sruthi Shankar in Bengaluru; Editing by Bernadette Baum

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.