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Wall Street closed sharply higher on Tuesday reversing the previous day’s losses as investors shrugged off trade war jitters. Elimination of nearly 300 important items from the list of Chinese products which were targeted by the Trump administration in the last round of tariffs along with a measured response on the part of China lifted confidence of market participants. Consequently, a broad-based market rally enabled all here major stock indexes to finish in positive territory.
The Dow Jones Industrial Average (DJI) closed at 26,246.96, climbing 0.7% or 184.84 points. The S&P 500 Index (INX) was up 0.5% to close at 2,904.31. The Nasdaq Composite Index (IXIC) closed at 7,956.11, gaining 0.8%. A total of 6.39 billion shares were traded on Tuesday, higher than the last 20-session average of 6.20 billion shares. Advancers outnumbered decliners on the NYSE by 1.35-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.42-to-1 ratio. The CBOE VIX decreased 6.5% to close at 12.79.
How Did the Benchmarks Perform?
The Dow closed in positive territory with 23 components of the 30-stock blue-chip index closing in the green while six finished in the red and one remained unchanged. The tech-heavy Nasdaq Composite ended in the green reversing its downward journey over the last two days on the back of strong showing by large-cap tech giants.
The S&P 500 finished on positive note led by an increase of 1.3% in Consumer Discretionary Select Sector SPDR (XLY) and a 0.9% rise in Industrials Select Sector SPDR (XLI). Notably, 8 out of 11 sectors of the benchmark index finished in the green while three ended in the red.
Market Participants Ignore Tariff Worries
Despite lingering trade related tensions between United States and its largest trading partner China, it seems that investors are gradually getting confident that the situation may not be as worse as it was earlier believed to be. A strong U.S. economy, robust job market and record corporate profits in the first half of 2018 are more than offsetting trade inflicted wounds.
Moreover, a relatively soft retaliatory measure taken by China against the latest round of U.S. tariffs was welcomed by investors. On Sep 17, President Trump announced of levying a tariffs worth $200 billion on Chinese goods. The new tariffs will be implemented from Sep 24.
At first, the Chinese government has indicated that fresh round of U.S. tariffs will put upcoming U.S.-China trade negotiations in jeopardy, compelling China to retaliate step by step. However, on Sep 18, China retaliated with tariffs worth of just $60 billion on U.S. goods. Notably, the range of tariff was kept within the range of 5% to 10% compared with 20% to 25% stated earlier.
Most of the large tech behemoths rallied on Tuesday recovering from the stiff losses of the previous day. Market anticipates technology sector to be least affected by the Trump administration’s intended second round of tariffs worth $200 billion on Chinese imports, consequently aiding the rally.
There are two reasons which lifted investors’ risk appetite. First, the U.S. government finally deleted 297 products from the original list of products revealed on Jul 10, which were subject to latest round of U.S. tariffs on Chinese goods. Most of the delisted products were useful for making various high-tech gadgets such as those produced by Apple Inc. (AAPL - Free Report) and Fitbit Inc. . Shares of Apple and Fitbit advanced 0.2% and 6.4%, respectively.
Second, the U.S. government set the tariff rate at 10% which will be increased to 25% from Jan 1, 2019. This was in contrast to Trump administration’s earlier stand of imposing 25% tariff from the beginning. The market anticipates that by lowering tariff rate for the time being the government has given time to corporates to adjust with the changed scenario.
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It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Stock Market News For Sep 19, 2018
Wall Street closed sharply higher on Tuesday reversing the previous day’s losses as investors shrugged off trade war jitters. Elimination of nearly 300 important items from the list of Chinese products which were targeted by the Trump administration in the last round of tariffs along with a measured response on the part of China lifted confidence of market participants. Consequently, a broad-based market rally enabled all here major stock indexes to finish in positive territory.
The Dow Jones Industrial Average (DJI) closed at 26,246.96, climbing 0.7% or 184.84 points. The S&P 500 Index (INX) was up 0.5% to close at 2,904.31. The Nasdaq Composite Index (IXIC) closed at 7,956.11, gaining 0.8%. A total of 6.39 billion shares were traded on Tuesday, higher than the last 20-session average of 6.20 billion shares. Advancers outnumbered decliners on the NYSE by 1.35-to-1 ratio. On the Nasdaq, advancers had an edge over decliners by 1.42-to-1 ratio. The CBOE VIX decreased 6.5% to close at 12.79.
How Did the Benchmarks Perform?
The Dow closed in positive territory with 23 components of the 30-stock blue-chip index closing in the green while six finished in the red and one remained unchanged. The tech-heavy Nasdaq Composite ended in the green reversing its downward journey over the last two days on the back of strong showing by large-cap tech giants.
The S&P 500 finished on positive note led by an increase of 1.3% in Consumer Discretionary Select Sector SPDR (XLY) and a 0.9% rise in Industrials Select Sector SPDR (XLI). Notably, 8 out of 11 sectors of the benchmark index finished in the green while three ended in the red.
Market Participants Ignore Tariff Worries
Despite lingering trade related tensions between United States and its largest trading partner China, it seems that investors are gradually getting confident that the situation may not be as worse as it was earlier believed to be. A strong U.S. economy, robust job market and record corporate profits in the first half of 2018 are more than offsetting trade inflicted wounds.
Moreover, a relatively soft retaliatory measure taken by China against the latest round of U.S. tariffs was welcomed by investors. On Sep 17, President Trump announced of levying a tariffs worth $200 billion on Chinese goods. The new tariffs will be implemented from Sep 24.
At first, the Chinese government has indicated that fresh round of U.S. tariffs will put upcoming U.S.-China trade negotiations in jeopardy, compelling China to retaliate step by step. However, on Sep 18, China retaliated with tariffs worth of just $60 billion on U.S. goods. Notably, the range of tariff was kept within the range of 5% to 10% compared with 20% to 25% stated earlier.
Consequently, shares of trade-sensitive stocks like The Boeing Co. (BA - Free Report) and Caterpillar Inc. (CAT - Free Report) were up 2.1% and 2%, respectively. Caterpillar carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Tech Stocks Rebound
Most of the large tech behemoths rallied on Tuesday recovering from the stiff losses of the previous day. Market anticipates technology sector to be least affected by the Trump administration’s intended second round of tariffs worth $200 billion on Chinese imports, consequently aiding the rally.
There are two reasons which lifted investors’ risk appetite. First, the U.S. government finally deleted 297 products from the original list of products revealed on Jul 10, which were subject to latest round of U.S. tariffs on Chinese goods. Most of the delisted products were useful for making various high-tech gadgets such as those produced by Apple Inc. (AAPL - Free Report) and Fitbit Inc. . Shares of Apple and Fitbit advanced 0.2% and 6.4%, respectively.
Second, the U.S. government set the tariff rate at 10% which will be increased to 25% from Jan 1, 2019. This was in contrast to Trump administration’s earlier stand of imposing 25% tariff from the beginning. The market anticipates that by lowering tariff rate for the time being the government has given time to corporates to adjust with the changed scenario.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>