Wall Street rises as blow from new tariffs less than feared

Peter Cardillo Of Spartan Capital Securities LLC Speaks On Trump’s Trade War
September 18, 2018
Wall Street, suspended on Trump announcement on China, ends lower
September 19, 2018

Wall Street rises as blow from new tariffs less than feared

(Reuters) – U.S. stocks rose on Tuesday, led by gains in Apple and Amazon, as investors judged the latest tit-for-tat tariffs between the United States and China as less damaging than expected.

The Trump administration’s selection of a lower 10 percent tariff and exclusion of Apple from the list of new tariffs convinced market players that it was going easy and giving U.S. companies enough time to prepare for a changing trade environment.

China’s retaliation only included $60 billion worth of U.S. goods and reduced the level of tariffs it would collect, convincing some that Beijing was running out of options to hit back.

“With these new $60 billion tariffs, the perception is that China has less tools to fight back,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York.

The benchmark S&P 500 and the Nasdaq were on track for their biggest percentage gain in nearly three weeks. The S&P was about 0.3 percent away from hitting a record high.

By 11:52 a.m. ET, the Dow Jones Industrial Average .DJI was up 138.14 points, or 0.53 percent, at 26,200.26, the S&P 500 .SPX was up 17.90 points, or 0.62 percent, at 2,906.70 and the Nasdaq Composite .IXIC was up 81.09 points, or 1.03 percent, at 7,976.89.

The tech index .SPLRCT, which dropped 1.4 percent on Monday ahead of the tariff announcement, climbed 1.05 percent, lifted by a 0.7 percent gain in Apple.

The consumer discretionary sector .SPLRCD gained 1.20 percent, boosted by a 2.5 percent gain in Amazon.com Inc (AMZN.O).

Stocks in the so-called FAANG group of leading tech stocks were also higher. Netflix (NFLX.O) was up 3.5 percent, while Google parent Alphabet (GOOGL.O) rose 1.7 percent.

Six of the 11 major S&P sectors were higher. The energy sector .SPNY rose 0.96 percent, after oil prices climbed on signs that the OPEC may not be prepared to raise output.

General Mills (GIS.N) fell 7.9 percent, the most on the S&P, after the Cheerios cereal maker fell short of sales and margins estimates.

Advancing issues outnumbered decliners by a 1.38-to-1 ratio on the NYSE and by a 1.76-to-1 ratio on the Nasdaq.

The S&P index recorded 25 new 52-week highs and three new lows, while the Nasdaq recorded 40 new highs and 61 new lows.