Major indexes ended in the green on Thursday as trade tensions between the United States and China appeared to ease. Stocks moved higher after China hinted its unwillingness to retaliate against Washington’s new round of tariffs. Second, a revision of second-quarter GDP growth revealed an even stronger consumer spending during the period, positively impacting stocks.
The Dow Jones Industrial Average climbed 1.3% to close at 26,362.25 on Aug 29. The broader S&P 500 and Nasdaq followed suit, rising 1.3% and 1.5% respectively. The former closed at 2,924.58 and the latter finished the day at 7,973.39. The fear-gauge CBOE Volatility Index (VIX) slumped 7.6% to close at 17.88 on Wednesday. Lastly, advancers outnumbered decliners on the NYSE by a 3.81-to-1 ratio.
China Wants to Resolve the Trade War
On Aug 29, China said it’s willing to tackle the trade dispute with the United States with a calm attitude. Gao Feng, spokesman for China’s Ministry of Commerce, said that the country firmly rejects “an escalation of the trade war”. He also noted that both parties had maintained “effective” communication.
Gao indicated that the Asian country was more interested to negotiate rather than retaliate. “China has plenty of means for counter measures, but under current situation, the question that should be discussed right now is about removing the U.S.′ new tariffs on $550 billion Chinese goods to prevent escalation of the trade war,” Gao said.
China’s statement came after President Donald Trump threatened to increase import tariffs on $250 billion worth of Chinese goods from 25% to 30% in effect from Oct 1. He also threatened to raise duties on another $300 billion in Chinese products from 10% to 15% implemented from Sept 1, in response to Chinese retaliation. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Per a second estimate released by the Bureau of Economic Analysis, real gross domestic product (GDP) rose 2% in the quarter ended June 2019. GDP slowed from a 3.1% gain in the first quarter. However, consumer spending was impressive during Q2. Americans spent more on dining out, apparels, cars and trucks apart from participating in other spending activities.
Although business outlook appeared lackluster and there was a slowdown in exports and corporate investment, companies registered the biggest rise in profits in five years.
Stocks that Made Headlines
Golar LNG Shares Tank on Wider-Than-Expected Q2 Loss
Golar LNG Limited (GLNG - Free Report) incurred a loss (excluding 49 cents from non-recurring items) of 62 cents per share in second-quarter 2019, wider than the Zacks Consensus Estimate of a loss of 34 cents. (Read more)
PetroChina H1 Earnings Edge Up on Upstream Strength
Chinese energy giant PetroChina Co. Ltd. (PTR - Free Report) announced first-half 2019 earnings of RMB 28.4 billion or RMB 0.155 per diluted share compared with RMB 27.4 billion or RMB 0.150 per diluted share a year earlier. (Read more)
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