NEW YORK, Sept 20 — US stocks rose today as an interest rate cut by China’s central bank and signs of co-operation on trade between the world’s two largest economies allayed concerns over global growth.
China cut its new one-year benchmark lending rate for the second month in a row on Friday, days after the Federal Reserve and the European Central Bank reduced borrowing costs and left the door open for further monetary stimulus.
The S&P 500 and the Nasdaq were set to end the week marginally higher after a rough start, sparked by attacks on Saudi oil facilities. Hopes of additional stimulus calmed investor nerves later in the week, nudging the benchmark S&P 500 closer to its record high hit in July.
“The market does seem to be in a bit of a waiting pattern, looking for indication for whether the economy will gain strength or the alternative indication that we are going to slow further,” said Rick Meckler, a partner at Cherry Lane Investments, a family investment office in New Vernon, New Jersey.
Market participants are hopeful of a de-escalation in US-China trade tensions as the two sides lay the groundwork for trade talks in October, following tariff concessions last week.
On Thursday, the US Trade Representative’s office said dozens more Chinese products would be excluded from existing tariffs, including dog collars, some printed circuit boards used in computers, certain auto parts and Christmas tree lights.
The S&P 500 healthcare index, which has been the worst performing S&P sector this year, rose the most among 10 of the 11 major sectors that were higher.
Netflix Inc slipped 3.5 per cent as Evercore ISI said recent data checks painted an uncertain picture of the streaming service provider’s international subscriber growth.
Its shares weighed on the communication services sector.
Boeing Co fell 0.5 per cent as the Federal Aviation Administration chief said a series of steps needed to be completed before the 737 MAX could return to service.
At 9.58am ET, the Dow Jones Industrial Average was up 64.15 points, or 0.24 per cent, at 27,158.94, the S&P 500 was up 7.43 points, or 0.25 per cent, at 3,014.22. The Nasdaq Composite was up 10.64 points, or 0.13 per cent, at 8,193.52.
Markets are likely to become more volatile during Friday’s session due to “quadruple witching,” where investors unwind positions in futures and options contracts before their expiration.
Chipmaker Xilinx Inc dropped 5.9 per cent after Chief Financial Officer Lorenzo Flores said he would step down, prompting Bank of America Merrill to downgrade its stock to “neutral”.
It dragged down the wider semiconductor index, which has been hit hard by the trade war, by 0.32 per cent.
Roku Inc dropped 9.5 per cent after Pivotal Research started coverage of its shares with a “sell” rating.
Advancing issues outnumbered decliners by a 2.03-to-1 ratio on the NYSE and by a 1.61-to-1 ratio on the Nasdaq.
The S&P index recorded 14 new 52-week highs and no new low, while the Nasdaq recorded 17 new highs and 18 new lows. — Reuters
