FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., May 20, 2019. REUTERS/Brendan McDermid
May 28, 2019
By Amy Caren Daniel
(Reuters) – U.S. stocks edged higher on Tuesday, propped up by the technology sector, but the likelihood of a protracted trade war between the United States and China kept gains in check.
Trump on Monday said he was “not yet ready” to make a deal with China but he expected one in the future. The back-and-forth between the two sides has sparked worries that the trade war would lead to a global economic slowdown.
“What you’re seeing is kind of an over-sold bounce, we’ll see over the course of the day if that holds,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee
“Last week wasn’t great, and we start this week with nothing fresh to trade off of and there is only so much pricing of tariff fears you can put in markets before you exhaust that as a downside catalyst.”
The benchmark S&P 500 index as of Friday’s close was about 4% off its record high hit on May 1, while the blue-chip Dow Jones Industrial index posted its fifth straight week of decline.
The technology sector, which is among the worst performing this month, was helped by a 7.5% jump in Total System Services Inc.
Global Payments Inc said it would buy the payment technology company for about $21.5 billion in stock. Global Payments was down 0.5%.
Advanced Micro Devices jumped 5% and also helped lift the sector, after the chip maker launched new computing and graphics products at an event in Taipei on Sunday. Rival Intel Corp fell 1.5%.
Among marquee stocks, Facebook Inc, Amazon.com, Netflix and Microsoft Corp were up more than 1% each.
At 10:08 a.m. EDT the Dow Jones Industrial Average was up 115.19 points, or 0.45%, at 25,700.88, the S&P 500 was up 12.95 points, or 0.46%, at 2,839.01 and the Nasdaq Composite was up 48.12 points, or 0.63%, at 7,685.13.
Investors are concerned that China might opt to weaponize its holdings of more than $1.1 trillion worth of U.S. Treasuries to retaliate against the tariffs imposed on Chinese imports.
The uncertainty in markets has sent investors seeking for safe-haven assets, with yields on the U.S. 10-year notes hitting its lowest level since October 2017.
Interest-rate sensitive banking stocks were 0.2% lower.
Among other stocks, Activision Blizzard Inc rose 5.1% after Goldman Sachs upgraded its stock to “buy” and said the videogame publisher would benefit from its recent game releases.
FedEx Corp fell 0.3% after Chinese telecoms equipment maker Huawei Technologies Co Ltd said it was reviewing its relationship with the U.S. package delivery company, after it diverted two parcels destined for Huawei addresses in Asia to the United States.
Also adding to the upbeat mood was a report from the U.S. Conference Board that showed the consumer confidence index rose to a reading of 134.1 in May, beating estimates of 130.
Advancing issues outnumbered decliners by a 1.68-to-1 ratio on the NYSE and by a 1.42-to-1 ratio on the Nasdaq.
The S&P index recorded 15 new 52-week highs and six new lows, while the Nasdaq recorded 36 new highs and 37 new lows.
(Reporting by Amy Caren Daniel, Medha Singh and Shreyashi Sanyal in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D’Silva)
