Markets closed higher on Tuesday after Chinese President Xi promised to take measures to open the country’s economy and cut import tariffs. Investors’ confidence rebounded as fears of a trade war eased to some extent, which saw stocks rallying almost throughout the trading session. This saw all three major indexes closing higher. Moreover, shares of Facebook too jumped after the company’s CEO Mark Zuckerberg testified in front of the Congress following news of a data misuse scandal involving millions of users.
The Dow Jones Industrial Average (DJI) rose 1.8%, to close at 24,408. The S&P 500 increased 1.7% to close at 2,656.87, led my tech stocks. The Nasdaq Composite Index closed at 7094.30, increasing 2.1%. A total of 7.14 billion shares were traded on Tuesday, lower than the last 20-session average of 7.33 billion shares. Advancers outnumbered decliners on the NYSE by a 3.16-to-1 ratio. On Nasdaq, a 3.93-to-1 ratio favored advancing issues.
How did the Benchmark Perform?
The Dow closed 428.90 points higher, as trade war tensions eased, after Chinese president Xi said that he would cut import duties. This saw shares of both Boeing (BA - Free Report) and Caterpillar (CAT - Free Report) increasing 3.8% and 3.5%, respectively. Boeing has a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The S&P 500 closed 43.71 points higher, led by the Energy Select Sector SPDR (XLE), whichincreased 3.3%, registering its best day since Nov 30, 2016. Also, the Technology Select Sector SPDR (XLK)jumped 2.5%. Nine of the 11 major S&P 500 sectors, barring Real Estate Select Sector SPDR (XLRE) and Utilities Select Sector SPDR (XLU),ended the day in positive territory. The Nasdaq also finished the day 143.96 points higher.
Xi’s Comments Ease Trade War Fears
Investors’ confidence were further reinstated on Tuesday after Xi said that he will take adequate steps by opening the country’s economy and increasing market access for foreign investors. He also promised to cut import tariffs on autos and other items. Xi’s comments deflated trade fears to some extent and gave a boost to investors’ confidence.
This immediately saw auto stocks rally. Shares of major automakers, General Motors Company (GM - Free Report) , Ford Motor Company (F - Free Report) and Fiat Chrysler Automobiles N.V. (FCAU - Free Report) rose 3.3%, 1.8% and 2%, respectively.
Zuckerberg Testifies, Facebook’s Shares Rise
While Xi’s comments to open economy and cut import tariffs eased fears of a trade war, Zuckerberg’s who testified in front of Congress on Tuesday, saw the social media giant’s shares rally 4.5%, its best day in two years. Zuckerberg’s testimony, which will continue over the week, comes after the company got embroiled in a data misuse scandal affecting personal data of 87 million users.
Zuckerberg said that the company failed to notify the FTC in 2015 about the data misuse issue and that it is trying hard to correct issues with its platform. While Zuckerberg took responsibility for the content on Facebook, he also said that it is a misconception that any data is regularly access by advertisers. Further, he staved off an attempt to get his to commit to backing increased regulation. This perhaps increased investors’ confidence in the company that saw its shares soaring on Tuesday.
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