por admin » Mié Sep 19, 2018 10:20 am
Dow jumps 200 points as Boeing and Caterpillar rise
Fred Imbert | Alexandra Gibbs
Published 6 Hours Ago Updated 5 Mins Ago
CNBC.com
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Veteran trader Art Cashin on Wednesday's market action
Stocks rose on Wednesday as investors bet that a trade war between the U.S. and China will not be as bad as previously feared.
The Dow Jones Industrial Average gained 200 points with Boeing and Caterpillar among the best performers. The S&P 500 advanced 0.25 percent as materials and financials outperformed.
Boeing shares rose 1.8 percent while Caterpillar climbed 2.2 percent.
Bank shares also added to the market's gains. Goldman Sachs and Bank of America both rose more than 2 percent, while Morgan Stanley gained 1.8 percent. Shares of J.P. Morgan Chase and Citigroup, meanwhile, advanced 2.4 percent and 2.5 percent, respectively.
The Nasdaq Composite slipped 0.1 percent, however, as Facebook, Amazon, Netflix, Alphabet and Apple all fell.
China slapped tariffs on $60 billion worth of U.S. goods on Tuesday. Prior to that, the Trump administration had put levies on about $200 billion worth of Chinese products.
On Wednesday, Chinese Premier Li Keqiang said China was facing "greater difficulties" in keeping its economy stable. He also said: "Deeply integrated into the world economy, the Chinese economy is inevitably affected by notable changes in the global economic and trade context." Li added, however, the Chinese have "sufficient tools" to manage these difficulties.
A trader on the floor of the New York Stock Exchange the morning after the Dow Jones Industrial Average dropped over 1,000 points on Feb. 9, 2018.
Spencer Platt | Getty Images News | Getty Images
A trader on the floor of the New York Stock Exchange the morning after the Dow Jones Industrial Average dropped over 1,000 points on Feb. 9, 2018.
Fears of a full-blown trade war between the two largest economies in the world have been a thorn for investors this year as tighter trade conditions could hurt corporate profits. However, stocks have been able to rise all year. The S&P 500 is up more than 8.5 percent in 2018 and is less than 1 percent removed from a record.
"Trade tariffs will remain a major concern not only to corporations but to market participants and especially to those professional investors who have never experienced a trade war outside of what they learned in college," said Robert Pavlik, chief investment strategist at SlateStone Wealth.
Pavlik added that while President Donald Trump's approach to trade policy is unconventional, "the U.S. economy is strong, earnings are healthy and confidence among consumers and investors remains high."
Asian stocks rose overnight, led by gains in Chinese and Japanese shares. Both the Shanghai Composite and Nikkei 225 rose 1.1 percent.
"Markets continue to ignore rising trade tensions, essentially hanging their hat on a 'Trump Tariff Put,'" said Nicholas Colas, co-founder of DataTrek Research. "If stocks begin to worry that the President's policies truly endanger economic and corporate profit growth and sell off, the administration will recalibrate. That works well now; we aren't so sure it will hold next year."
Tesla shares fell 0.6 percent after the company said the Justice Department last month requested documents regarding CEO Elon Musk's tweets in early August about taking the company private. The New York Times also reported the Securities and Exchange Commission has sent subpoenas to Goldman Sachs and Silver Lake, which helped Tesla evaluate going private.
Analysts at Guggenheim hiked their price target on the stock to $420 from $360, implying a 14.2 percent upside from Tuesday's close. "We believe that Netflix subscriber penetration will significantly exceed what is implied in the company's current valuation," the analysts said. The stock rose as much as 2.7 percent before falling more than 1 percent.