US stocks end wild week on a hopeful note

Parvez Jabri August 17, 2019

NEW YORK: Wall Street closed a rollercoaster week on a positive note amid hope for progress in the US-China trade war and a reprieve from recession fears, with all three major indexes posting solid gains.

US economic data was mixed but offered enough good news not to ruin the party created by President Donald Trump’s announcement that he has a phone call scheduled soon with Chinese leader Xi Jinping.

After a wild week in which the Dow Jones Industrial Average posted its worst day of the year, the index ended the session with a gain of 1.2 percent at 25,886.01, but is still down compared to the previous Friday.

The broad-based S&P 500 jumped 1.44 percent to finish at 2,888.68, and the tech-rich Nasdaq Composite Index increased 1.67 percent to end at 7,895.99.

“In the last couple of days, the sellers have been exhausted,” said Maris Ogg of Tower Bridge Advisors. “The volatility continues. But I don’t think this is the beginning of a trend.”

Investors were spooked when a key recession signal was flashing red: The yield on the 30-year Treasury bond hit an all-time low on Thursday, falling below two percent for the first time, but peeked just above that level Friday, back above shorter-term yields.

Trump late Thursday revealed plans for call with Xi, and said trade negotiations set for September are “still on,” offering signs of hope that a deal could be reached.

Any agreement is likely to remove a key source of turmoil that has fueled growing concerns about a possible recession on the horizon.

“The market is still grappling with the impact of the tariffs and deceleration in Europe and China,” Ogg told AFP. “We don’t know how far it’s going to go.”

Farm machinery manufacturer Deere saw its shares gain 3.8 percent despite reporting disappointing earnings, due to uncertainty amid the trade war that has hit US farmers hard, as it also posted strong results in its construction and forestry business.

Industrial titan General Electric surged close to 10 percent after CEO Larry Culp bought nearly $2 million in shares, boosting investor confidence after whistleblower Harry Markopolos accused the company of massive accounting fraud — a charge the company vehemently denied.

Copyright AFP (Agence France-Press), 2019

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