Global stocks jump as technology and energy companies rise
NEW YORK (AP) — Global stock indexes are rising Wednesday to reverse some of their big losses from the week before. In the U.S., technology, health care and industrial companies are climbing.
The Wall Street Journal reported that China’s government could make changes to its “Made in China 2025” economic development plan. That could address some points of contention between the U.S. and China. China wants to create leading companies in fields like artificial intelligence, electric cars and robotics, but the Trump administration says the government is unfairly subsidizing Chinese companies and discriminating against foreign rivals.
KEEPING SCORE: The S&P 500 index rose 26 points, or 1 percent, to 2,663 at 3 p.m. Eastern time. The Dow Jones Industrial Average gained 274 points, or 1.1 percent, to 24,645. It rose as much as 458 points in morning trading. The Nasdaq composite jumped 102 points, or 1.5 percent, to 7,134. The Russell 2000 index of smaller-company stocks added 21 points, or 1.5 percent, to 1,461.
GROWTH WORRIES: “Any time you get some semblance of good news on trade you’ve had this tendency to see a pretty sharp rally,” said Liz Ann Sonders, chief investment strategist for Charles Schwab.
Stocks have gyrated this week after taking steep losses at the end of last week. The hour-to-hour changes reflect investors’ nervousness about the health of the global economy, as economic growth is expected to slow in 2019 and the U.S.-China trade dispute and rising interest rates could both make that slowdown more painful. Sonders said investors overlooked those threats for a time, but can’t ignore them anymore.
“Some of these intraday reversals have been quite extraordinary,” said Sonders. “You have to go back to the financial crisis era to see … such a big swing on consecutive days.”
LEADERS: Among technology companies, chipmaker Broadcom gained 3.9 percent to $256.49. Amazon gained 1.9 percent to $1,674 and Netflix jumped 4.4 percent to $276.95 as internet and media companies joined in the gains.
Among industrials, Boeing rose 2 percent to $328.42 and equipment rental company United Rentals surged 8 percent to $110.03 after it gave strong forecasts for 2019 and said it will start buying back stock this month.
TURMOIL IN BRITAIN: British legislators forced a no-confidence vote in Prime Minister Theresa May. The vote could end May’s tenure and bring even more chaos into British politics. However investors appeared to believe May will survive the vote, as British stocks and the pound both rose.
Lawmakers within the Conservative Party have expressed frustrations with May over her negotiations of Britain’s departure from the European Union, and many of them want a cleaner break from the trading bloc. Opposition lawmakers don’t want Britain to leave the EU.
The uncertainty has knocked the British pound sharply lower in recent days, but it rose Wednesday to $1.2631 from $1.2527. The FTSE 100 stock index added 1.1 percent.
BANK ON IT: Deutsche Bank jumped after Bloomberg News reported that the German government might take steps to make it easier for the struggling bank to combine with competitor Commerzbank. U.S.-traded shares of Deutsche Bank gained 9 percent to $9.08, but they’re still down 52 percent this year and have fallen almost 80 percent over the past five years as the company reels from weak results and investments in Greek and Italian bonds that went bad.
Commerzbank stock added 5.6 percent in Frankfurt.
LET THE MUSIC PLAY: Tencent Music Entertainment, the largest music streaming service in China, climbed in its first day of trading. The company’s IPO of 82 million shares priced at $13 a share. Slightly more than half are being sold by the company and the rest are being sold by shareholders. At midday the stock rose 7.7 percent to $14.
SWEARING AT OATH: Verizon Communications sank 2.6 percent to $57.34 after it said it will take a $4.6 billion charge because of weak results from AOL and Yahoo, the internet businesses it spent about $8 billion to acquire. Verizon put the two companies and several others into a division called Oath, and hoped it would be able to turn them into a profitable digital advertising unit.
OVERSEAS: The CAC 40 in France surged 2.1 percent and Germany’s DAX rose 1.4 percent. Japan’s benchmark Nikkei 225 jumped 2.2 percent and South Korea’s Kospi rose 1.4 percent. The Hang Seng in Hong Kong added 1.6 percent.
ENERGY: Benchmark U.S. crude oil fell 1 percent to $52.15 a barrel in New York. Brent crude, the international standard, lost 0.1 percent to $60.15 per barrel in London.
Wholesale gasoline dipped 1.3 percent to $1.42 a gallon and heating oil was unchanged at $1.85 a gallon. Natural gas dropped 6.1 percent to $4.14 per 1,000 cubic feet.
BONDS: Bond prices slipped. The yield on the 10-year Treasury note rose to 2.90 percent from 2.88 percent.
CURRENCIES: The dollar dipped to 113.21 yen from 113.40 yen. The euro rose to $1.1366 from $1.1325.
METALS: The price of gold rose 0.2 percent to $1,250 an ounce, silver rose 1.5 percent to $14.85 an ounce and copper edged up 0.1 percent to $2.77 a pound.
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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP
The Western Journal has not reviewed this Associated Press story prior to publication. Therefore, it may contain editorial bias or may in some other way not meet our normal editorial standards. It is provided to our readers as a service from The Western Journal.
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