Off The Wire
S&P 500 ends up in choppy action after Trump comments on China
(Reuters) - The S&P ended a choppy session higher on Friday after President Donald Trump made comments on China that were less worrisome for the U.S. economy than investors apparently had feared.
Stocks initially extended losses after Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong in response to China’s plans to impose new security legislation in the semi-autonomous territory.
But Trump made no mention of any action that could undermine the Phase One trade deal that Washington and Beijing struck early this year, a concern that had cast a cloud over the market throughout the week.
“He began speaking in a very tough tone,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. “The market was worried he was going to announce something substantial, something detrimental to the U.S. economy. Then, as he spoke, it became clear the actions being taken were not going to be as dramatic as originally feared.”
Trump also said the United States is terminating its relationship with the World Health Organization, something he had threatened to do earlier this month.
S&P 500 technology shares .SPLRCT gave the index its biggest boost, while financials .SPSY were the biggest drag.
The latest turmoil has fueled concern that worsening tensions between the two world’s largest economies could put trade progress between the countries in jeopardy.
Expectations of a quick economic recovery from the coronavirus pandemic have driven the S&P 500 .SPX up more than 30% from its March lows.
Unofficially, the Dow Jones Industrial Average .DJI fell 19.45 points, or 0.08%, to 25,381.19, the S&P 500 .SPX gained 14.47 points, or 0.48%, to 3,044.2 and the Nasdaq Composite .IXIC added 120.88 points, or 1.29%, to 9,489.87.
New York Governor Andrew Cuomo said Friday that New York City is “on track” to enter phase one of reopening on June 8, and he announced that five upstate regions will now transition to phase two.
Federal Reserve Chair Jerome Powell, speaking in a webcast organized by Princeton University Friday, reiterated the U.S. central bank’s promise to use its tools to shore up the economy amid the coronavirus pandemic.
Reporting by Caroline Valetkevitch in New York, additional reporting by Sinead Carew; Editing by Leslie Adler