Off The Wire
Wall St. rises as recovery hopes offset U.S. protests, China tensions
(Reuters) - U.S. stocks edged higher on Monday on prospects of a post-pandemic economic recovery, but the sentiment remained fragile amid protests across the country over race and an ongoing standoff between Washington and Beijing.
U.S. manufacturing activity eased off an 11-year low in May, an Institute for Supply Management (ISM) survey showed, the strongest sign yet that the worst of the economic downturn was behind as businesses reopen.
“With the economic data beginning to ease off from their dire position two months ago, there is further upside as we head into the summer, which is normally a fairly difficult period for markets,” said Chris Beauchamp, chief market analyst at IG.
The three main indexes had opened lower as National Guard troops were deployed over the weekend in 15 states and Washington, D.C. in an attempt to quell a sixth night of violence that began with peaceful protests over the death of a black man, George Floyd, in police custody.
Target Corp and Walmart Inc closed stores during the unrest that included looting in many cities. Target and Walmart shares fell 1.9% and 0.9%, respectively.
Further denting the sentiment, reports said China had told state-owned firms to halt agricultural purchases from the United States, after Washington said it would eliminate special treatment for Hong Kong to punish Beijing.
“The tensions between the United States and China and the U.S. protests are beginning to make investors a little bit nervous,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
The escalation in Sino-U.S. tensions poses a major threat to the stock market’s rebound since late March that was powered by expectations of a recovery from the coronavirus-led downturn.
U.S. stocks had rebounded late in Friday’s session, with the S&P 500 logging its biggest two-month percentage gain since 2009, after President Donald Trump’s measures against China did not include a breakdown of the trade deal like many had feared.
At 10:16 a.m. ET, the Dow Jones Industrial Average was up 30.31 points, or 0.12%, at 25,413.42, the S&P 500 was up 3.03 points, or 0.10%, at 3,047.34. The Nasdaq Composite was up 31.53 points, or 0.33%, at 9,521.40.
Healthcare stocks shed 1.2%, weighing the most on the benchmark index.
Pfizer Inc fell 7.6% after the drugmaker said the late stage trial of its breast cancer drug Ibrance was unlikely to meet the main goal of study.
Gilead Sciences Inc fell 3.8% after its antiviral drug remdesivir had mixed results in a late stage study of people with moderate COVID-19, as patients given a five-day course of the treatment showed statistically significant improvement, while those given it for 10-days did not.
Coty Inc jumped 19.8% after the cosmetics company appointed Chairman Peter Harf as its new chief executive officer.
Advancing issues outnumbered decliners by a 2.60-to-1 ratio on the NYSE and by a 1.87-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new lows, while the Nasdaq recorded 52 new highs and six new lows.
Reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Bernard Orr and Saumyadeb Chakrabarty