NEW YORK, May 30 ― US stocks finished mostly higher yesterday after President Donald Trump announced measures against China in response to new security legislation that were less threatening to the US economy than investors had feared.
The Dow ended the session slightly lower, but all three indexes rose for the week and registered a second straight month of gains. The S&P 500 added 17.8 per cent for April and May, its biggest two-month percentage gain since 2009.
The S&P 500 initially extended losses after Trump said he was directing his administration to begin the process of eliminating special treatment for Hong Kong in response to China's plans to impose new security legislation in the semi-autonomous territory.
But Trump made no mention of any action that could undermine the Phase One trade deal that Washington and Beijing struck early this year, a concern that had cast a cloud over the market throughout the week.
“He began speaking in a very tough tone,” said Chris Zaccarelli, chief investment officer at Independent Advisor Alliance in Charlotte, North Carolina. “The market was worried he was going to announce something substantial, something detrimental to the US economy. Then, as he spoke, it became clear the actions being taken were not going to be as dramatic as originally feared.”
Trump also said the United States is terminating its relationship with the World Health Organisation, something he had threatened to do earlier this month.
S&P 500 technology shares gave the index its biggest boost, while financials were the biggest drag.
The latest confrontation between the US and China has fueled concern that worsening tensions between the two world's largest economies could derail the recent sharp gains in the stock market.
Expectations of a quick economic recovery from the coronavirus pandemic have driven the S&P 500 up more than 30 per cent from its March lows.
The Dow Jones Industrial Average fell 17.53 points, or 0.07 per cent, to 25,383.11, the S&P 500 gained 14.58 points, or 0.48 per cent, to 3,044.31, and the Nasdaq Composite added 120.88 points, or 1.29 per cent, to 9,489.87.
For the month, the Dow added 3.9 per cent, the S&P 500 gained 4.5 per cent, and the Nasdaq rose 6.8 per cent. For the week, the Dow and S&P 500 each rose more than 3 per cent, and the Nasdaq gained 1.8 per cent.
New York governor Andrew Cuomo said yesterday that New York City is “on track” to enter phase one of reopening on June 8, and he said five upstate regions will now transition to phase two.
Federal Reserve Chair Jerome Powell, speaking in a webcast organised by Princeton University yesterday, reiterated the US central bank's promise to use its tools to shore up the economy amid the coronavirus pandemic.
Twitter was down 2 per cent and Facebook Inc shares slipped 0.2 per cent, a day after Trump signed an order threatening social media firms with new regulations over free speech.
Upscale department store chain Nordstrom Inc slumped 11 per cent after it reported a near 40 per cent fall in quarterly sales due to pandemic-led store closures.
Salesforce.com Inc slipped 3.5 per cent as the cloud-based business software maker cut its annual revenue and profit forecasts.
Declining issues outnumbered advancing ones on the NYSE by a 1.04-to-1 ratio; on Nasdaq, a 1.04-to-1 ratio favoured advancers.
The S&P 500 posted 17 new 52-week highs and no new lows; the Nasdaq Composite recorded 60 new highs and 14 new lows.
Volume on US exchanges was 13.62 billion shares, compared to the 11.3 billion average for the full session over the last 20 trading days. ― Reuters
