U.S. stock rose Thursday, putting the S&P 500 on track to extend its recent uptick to a fourth straight session, as technology stocks led the day’s advance. News that China may be receptive to overtures from the U.S. on new trade talks is also soothing trade-related jitters.
What are the main benchmarks doing?
The Dow Jones Industrial Average DJIA, +0.47% advanced 134 points, or 0.5%, to 26,135. The S&P 500 SPX, +0.44% rose 14 points, or 0.5%, to 2,903 and the Nasdaq Composite Index COMP, +0.68% climbed 70 points, or 0.9% to 8,024.
The session is unusually active as recent trading has been slight. At current levels, the S&P 500 is on track for its largest move — in either direction — for the month.
The market’s gains were broad with nine of the 11 primary S&P 500 sectors higher, led by technology stocks which were the best performers. Among notable gainers were Apple Inc. AAPL, +2.25% which rose 3% a day after it unveiled new iPhones. Alphabet Inc. GOOGL, +0.43% GOOG, +0.70% added 0.7% and Microsoft Corp. MSFT, +0.89% added 1.1%.
Tech has struggled lately, with the sector down 1.2% thus far this month, compared with the 0.1% rise of the S&P 500.
What’s driving markets?
Investors continue to track trade tensions between the U.S. and China, the world’s two largest economies. But there is some optimism that the Trump administration is giving Beijing another chance to try to stave off new tariffs on $200 billion in Chinese exports. A fresh round of trade talks could take place later this month.
The Wall Street Journal also reported that Trump officials sense more flexibility among Chinese officials to negotiate to find common ground that could avert a full-blown trade war.
While Wall Street has mostly shrugged off escalating trade tensions, with the S&P about 1% from a record, analysts are concerned that the trade issue, if it worsens, could act as a sizable headwind on growth.
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Meanwhile, the European Central Bank made no change on interest rates, and repeated that it doesn’t expect any changes until summer 2019 at least as it remains on track to end its bond-buying program in December. The ECB slightly trimmed its GDP growth forecasts for both 2018 and 2019, and ECB President Mario Draghi said that risks to the euro area’s growth outlook were “broadly balanced.”
Which economic reports are in focus?
The consumer-price index rose by 0.2% in August, its fifth straight increase. Economists polled by MarketWatch had predicted a 0.3% gain. Separately, jobless claims fell slightly in the latest week, coming in at a 49-year low.
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Atlanta Fed President Raphael Bostic is due to speak about the economic outlook at an event in Jackson, Miss., at 1:15 p.m. Eastern.
What are market analysts saying?
“There are a lot of variables out there. Some are positive, like earnings growth, while others are negative, like the U.S. dollar. Those crosscurrents mean there’s been no real direction in either way, and it makes September something of a scary month for me, because there’s a lack of earnings data and I’m worried the market can be dragged down on light volume because of news flow surrounding tariffs,” said John Thomas, chief investment officer of Global Wealth Management.
Thomas noted that markets have recently been shrugging off tariff news, which he said was a cautious signal. “I wouldn’t way we’re becoming immune to the issue, but we brush it off more every day, and I’m worried markets underappreicate the impact it could have on large-capitalization companies that export a lot. Complacent is a good term for how things stand right now; everyone expects the market to continue going up, and that’s a concern.”
Laban Yu, an equity analyst at Jeffries, predicted that China will accept the U.S. offer for negotiations but does not expect China will make any significant concessions. On the other hand, he believes Trump is under quite a bit of pressure to ease up on trade. “With poll numbers sagging, we believe Trump may settle for face saving ‘concessions’. This offer to talk before additional tariffs are implemented may reveal a weakened hand, in our view,” he said in a note.
Which stocks are in focus?
Qualcomm Inc. QCOM, +4.39% rallied 3.9% after it entered into a $16 billion accelerated stock repurchase program.
HollyFrontier Corp. HFC, +2.01% rose 2.1% after the company’s board authorized a $1 billion stock buyback program.
Fred’s Inc. FRED, -19.92% plunged 18% after it reported a drop of 3.5% in its second-quarter same-store sales. It also reported a drop in revenue and a loss that widened from the previous year.
Kroger Co. KR, -10.08% shares sank 11% after it reported its second-quarter results, which included same-store sales that rose less than expected.
Pivotal Software Inc. PVTL, -21.66% shares tumbled 22% after the software company reported results and a forecast that were generally better than expected, though it missed on billings.
Shares of Acorda Therapeutics Inc. ACOR, -5.41% shed 3.8%. The company said the U.S. Food and Drug Administration has extended the review period for a treatment for symptoms of Parkinson Disease.
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What are other assets doing?
European stocks were mixed while Asian stock markets closed higher with the exception of Australian equities. The U.S. Dollar Index DXY, -0.28% extended its decline, falling 0.2%.
Oil futures CLV8, -2.29% fell more than 2% as global supplies hovered at a record and Hurricane Florence weakened ahead of its expected landfall.
—Victor Reklaitis contributed to this article
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