Stocks Open Higher on Hopes for U.S.-China Trade Progress
June 26 2019 - 10:06AM
Dow Jones News
By Will Horner
-- U.S. stocks, bond yields rise on trade hopes
-- European stocks rise, Asian indexes pause
-- Bitcoin breaches $12,000
U.S. stocks opened higher Wednesday amid hopes for progress
toward a U.S.-China trade deal.
The Dow Jones Industrial Average rose 60 points, or 0.2%, to
26610 shortly after the opening bell. The S&P 500 added 0.3%
and the Nasdaq Composite climbed 0.7%.
The indexes traded higher following comments from U.S. Treasury
Secretary Steven Mnuchin in a CNBC interview that a trade deal
between the U.S. and China had been nearly complete. He didn't say
where the deal stands now.
The yield on the 10-year U.S. Treasury note rose to 2.013%
Wednesday, from 1.994% Tuesday. Bond yields fall as prices rise.
The WSJ Dollar Index, which tracks the currency against a basket of
others, edged up 0.1%.
President Trump and Chinese President Xi Jinping are expected to
meet at the G-20 in Japan later this week, in a what is seen by
analysts as an important moment in the trade dispute between the
two nations.
That upward momentum in equities marked a reversal from Tuesday,
after Fed Chairman Jerome Powell defended the central bank's
independence, pushing back against signals from financial markets
and calls from President Trump to lower interest rates. Mr. Powell
said officials would ease monetary policy only if data showed a
sustained downward trend in the U.S. economy.
The comments from Mr. Powell and other Fed officials might have
been aimed at putting a "cold shower on markets," which were "very
heated up" about the prospect of a large cut in interest rates,
said Thomas Flury, head of foreign exchange at UBS Global Wealth
Management.
Fed officials "wanted to prevent markets from running into too
much exuberance on the rate cut story...It's a game with
communication and playing with expectations to bring markets a bit
back into more reasonable ranges," he said.
Oil markets rallied as the rhetoric between Iran and the U.S.
grew more confrontational and after data from an industry group
late Tuesday showed U.S. crude stockpiles had fallen by more than
expected. Global benchmark brent crude oil jumped 0.9% to $65.22
Wednesday, while U.S. benchmark West Texas Intermediate climbed
2.5% to $59.28 a barrel.
Bitcoin extended its record rise, breaking above $12,000 as
cryptocurrencies have benefited since Facebook said last week it
planned to launch its own digital currency.
U.S. stocks weakened Tuesday after Mr. Powell's comments. The
Dow Jones Industrial Average closed down 0.7%, its biggest decline
since May, while the S&P 500 fell 1%.
Micron Technology rose Wednesday after the memory chip maker
reported better-than-expected third-quarter results and said
Tuesday that it had resumed shipments to Huawei after determining
that they didn't run afoul of U.S. curbs on exports to the Chinese
telecom company.
A four-day rally in gold prices that had propelled the precious
metal to its highest level since 2013 halted. Gold fell Wednesday
0.4% to $1,412.30 a troy ounce.
Elsewhere, the Stoxx Europe 600 was broadly flat midday and
Asian markets were slightly lower or close to flat, with Japan's
Nikkei posting the largest decline of 0.5%.
(END) Dow Jones Newswires
June 26, 2019 09:51 ET (13:51 GMT)
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