Wall Street bounces back on renewed trade optimism

Traders work on the floor at the New York Stock Exchange November 11, 2019. — Reuters pic

NEW YORK, Dec 5 — Wall Street rebounded yesterday as investor optimism got a boost from US President Donald Trump’s remarks that talks with China on an interim trade deal were going “very well.”

All three major US stock indexes snapped a three-day losing streak with a broad-based rally, led by financial, healthcare and tariff-sensitive technology stocks.

Trump’s comments supported a Bloomberg report that the world’s two largest economies were closer to agreeing how many tariffs would be rolled back in a “phase one” trade deal.

Fears that a stalemate in negotiations could lead to new tariffs taking effect as scheduled on December 15 have dampened market participants’ enthusiasm in recent days, with the major US stock averages falling back from last week’s record highs.

Still, even as stock markets get whipsawed by daily trade developments, Doug Cote, senior portfolio manager at Voya Investment Management in New York, believes investors should not lose sight of solid underlying market fundamentals.

“Anything that happens on any day is because of trade, but it’s a much richer mosaic underneath,” Cote said. “The consumer’s on fire. That’s what’s behind the resilience in the market and this will be the best holiday season on record.”

“Everyone sees this trade battle as World War Three, and it’s not,” Cote added.

The Dow Jones Industrial Average rose 146.97 points, or 0.53 per cent, to 27,649.78, the S&P 500 gained 19.57 points, or 0.63 per cent, to 3,112.77 and the Nasdaq Composite added 46.03 points, or 0.54 per cent, to 8,566.67.

All 11 major sectors of the S&P 500 ended the session in positive territory, with energy enjoying the biggest percentage gain, boosted by a 4.0 per cent jump in crude

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