Stocks Climb on Trade Optimism
October 09 2019 - 10:31AM
Dow Jones News
By Anna Isaac
U.S. stocks rose Wednesday as investors awaited the resumption
of U.S.-China trade talks and looked for fresh signals from the
Federal Reserve on monetary easing.
The Dow Jones Industrial Average rose 0.6% and the S&P 500
gained 0.7%, a day after the latest spat between the world's two
largest economies threatened to undermine the trade negotiations
set to resume Thursday.
Tensions between the U.S. and China appeared to ratchet up this
week as the U.S. imposed export restrictions on more than two dozen
Chinese firms, citing their role in abuse of Muslim minorities, and
put visa restrictions on Chinese officials. But market observers
Wednesday pointed to optimism on the trade front, as Bloomberg
reported that China was open to reaching a partial deal.
Later Wednesday, investors will listen closely to any fresh
signals from Federal Reserve Chairman Jerome Powell in a speech in
Kansas City. The Fed will increase its purchases of short-term
securities soon in an effort to avoid stress in lending markets,
Mr. Powell said Tuesday.
The U.S. central bank will later Wednesday release the minutes
from its September meeting, which will likely be scrutinized for
any insight into the interest-rate outlook, though economic data
and market events since that meeting may have changed policy
makers' views.
"What the Fed minutes discuss is likely to be stale
information," said Jordan Rochester, foreign exchange strategist at
Nomura Bank. "The data has deteriorated since they had their
discussion. After the poor manufacturing figures more recently,
they softened their tones."
The yield on the 10-year U.S. Treasury note was 1.563%, up from
1.532% Tuesday. Yields rise as prices fall.
Among individual companies, Johnson & Johnson shares fell
0.9% after a Philadelphia jury ordered the company to pay $8
billion in damages to a man who said that using antipsychotic drug
Risperdal caused enlarged breasts.
In Japan, the benchmark Nikkei 225 index slipped 0.6% as data on
machine-tool orders confirmed a bleak picture for the country's
manufacturing sector.
The "numbers remain abysmal," analysts at Pantheon
Macroeconomics said in a note. "The absence of any hints of a
sustainable recovery suggests that industrial production in Japan,
and output globally, looks set to stay subdued in year-on-year
terms," they said.
Hong Kong's Hang Seng dropped 0.8% amid tensions over protests
in the city.
Karen Langley contributed to this article.
Write to Anna Isaac at anna.isaac@wsj.com
(END) Dow Jones Newswires
October 09, 2019 10:16 ET (14:16 GMT)
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