FILE PHOTO: A trader works on the trading floor at the New York Stock Exchange (NYSE) in New York City, U.S., September 3, 2019. REUTERS/Andrew Kelly
September 4, 2019
By Sinéad Carew
New York (Reuters) – Wall Street’s main indexes rebounded on Wednesday, after robust economic data from China, easing tensions in Hong Kong and British lawmakers’ approval of a law to delay Brexit provided a dose of optimism to investors worried about global growth.
Lawmakers in Britain’s lower house of Parliament voted to approve legislation designed to prevent Prime Minister Boris Johnson’s government from taking the country out of the European Union without a deal.
In China, activity in the services sector expanded at the fastest pace in three months in August, providing a boost to the world’s second-largest economy, which has been struggling to reverse a prolonged slump in its manufacturing sector.
Hong Kong leader Carrie Lam withdrew an extradition bill that had triggered months of often violent protests in the Chinese-ruled city.
“Some of the pessimism we started the month off with has eased slightly,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance, in Charlotte, North Carolina.
“Anything that happens that could possibly derail a hard Brexit is a positive for stocks,” said Zaccarelli, who also pointed to economic data from China and Germany and the news from Hong Kong.
The president of the New York Federal Reserve Bank, John Williams, said the U.S. economy appeared to be in a good place while saying that he is ready to “act as appropriate” to help avoid a downturn.
The combination of news provided some relief after investors fled equities on Tuesday following data that showed a contraction in U.S. factory activity in August and after a new round of tariffs from Washington and Beijing began over the weekend.
The Federal Reserve’s Beige Book released on Wednesday, showed that the U.S. economy grew at a modest pace in recent weeks, with manufacturing buffeted by a global slowdown while consumer purchases gave mixed signals. The report is a compendium of anecdotes from companies around the country.
The benchmark U.S. Treasury 10-year yield <US10YT=RR> rose on Wednesday, with the yield curve at its steepest in more than two weeks.
At 3:27PM, the Dow Jones Industrial Average <.DJI> rose 217.91 points, or 0.83%, to 26,335.93, the S&P 500 <.SPX> gained 28.92 points, or 1.00%, to 2,935.19 and the Nasdaq Composite <.IXIC> added 96.59 points, or 1.23%, to 7,970.74.
Technology stocks <.SPLRCT> provided the biggest boost of the S&P’s 11 major sectors with a 1.5% gain. The only sector in the red was healthcare <.SPXHC>, which was down 0.3%.
Tyson Foods Inc <TSN.N> shares fell 7% after the biggest U.S. meat processor cut its 2019 earnings forecast.
Starbucks Corp <SBUX.O> dropped 0.9% after the company said it expects 2020 adjusted profit growth to be lower than 2019 as it factors in the impact of a one-time tax benefit that has inflated its bottom line this year.
Advancing issues outnumbered declining ones on the NYSE by a 3.85-to-1 ratio; on Nasdaq, a 2.08-to-1 ratio favored advancers.
The S&P 500 posted 64 new 52-week highs and three new lows; the Nasdaq Composite recorded 57 new highs and 74 new lows.
(Reporting by Sinead Carew; Additional reporting by Uday Sampath and Shreyashi Sanyal in Bengaluru; Editing by Leslie Adler)
