Wall Street rebounds as technology, industrial stocks rise

Advancing issues outnumbered decliners for a 1.54-to-1 ratio on the NYSE and a 1.48-to-1 ratio on the Nasdaq. — Reuters pic
Advancing issues outnumbered decliners for a 1.54-to-1 ratio on the NYSE and a 1.48-to-1 ratio on the Nasdaq. — Reuters pic

SHAH ALAM, July 12 — Technology and industrial stocks led Wall Street higher today as some big deals and optimism about the earnings season helped offset fears about a US-China trade war.

CA Inc jumped 18.1 per cent, the most on the benchmark S&P 500 index, after chipmaker Broadcom announced a surprise US$18.9 billion (RM76.3 billion) deal to buy the US business software company. Broadcom fell 16.8 per cent, leading S&P losers.

Comcast gained 0.7 per cent after it made a US$34 billion bid for European pay-TV group Sky, trumping an offer from 21st Century Fox. Shares of Rupert Murdoch’s company inched up 0.3 per cent.

Nine of the 11 major S&P sectors were higher, led by the S&P 500 technology sector’s 1 per cent gain. The industrial sector rose 0.6 per cent.

Yesterday, industrials led a slide on Wall Street after the US threatened to impose tariffs on an additional US$200 billion worth of Chinese goods. China said today the two countries have not been in touch about restarting talks and while it does not want a trade war, it would fight if necessary.

“There still seems to be some hope that common sense will prevail and a full-blown trade war will be averted.” Craig Erlam, senior market analyst at online forex broker Oanda, said in a note.

Boeing and Caterpillar, which have been among the hardest hit by the recent trade dispute, rose about 1 per cent and were among the Dow’s biggest boosts.

At 10:05am EDT the Dow Jones Industrial Average was up 169.07 points, or 0.68 per cent, at 24,869.52, the S&P 500 was up 14.72 points, or 0.53 per cent, at 2,788.74 and the Nasdaq Composite was up 55.48 points, or 0.72 per cent, at 7,772.09.

Shares of Apple and Microsoft, both up around 1 per cent, and Facebook rising 1.3 per cent, led the gains in the technology sector.

Delta Air Lines dropped 1.3 per cent after the carrier cut its full-year earnings forecast. The stock was higher in premarket trading after its quarterly profit topped estimates due to higher average fares.

The earnings season kicks off in earnest on Friday, and overall S&P 500 companies are expected to post second-quarter profit growth of around 21 per cent, according to Thomson Reuters I/B/E/S.

Labour market conditions remained robust in early July, while a report indicated the underlying trend in consumer prices continued to point to a steady buildup of inflation pressure that could keep the Federal Reserve on a path of gradual interest rate hikes.

Advancing issues outnumbered decliners for a 1.54-to-1 ratio on the NYSE and a 1.48-to-1 ratio on the Nasdaq.

The S&P index recorded 26 new 52-week highs and two new lows, while the Nasdaq recorded 56 new highs and 21 new lows. — Reuters

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