Wall Street rallies on trade deal hopes; Apple hits record high

(Reuters) – Wall Street rose for the third straight session on Friday, as investors expected top-level trade talks between the United States and China to result in a partial trade deal and delay planned U.S. tariff increases. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., October 9, 2019. REUTERS/Brendan McDermidShares of Apple Inc (AAPL.O) hit a record high and were the biggest boost to the S&P 500 and Nasdaq, while the technology sector .SPLRCT was headed for its best day in five weeks. President Donald Trump said the trade negotiations were going well, and he would meet Chinese Vice Premier Liu He later in the day. The top-level discussions enter their second day on Friday. “The President seems to indicate that there is a possibility of an interim trade deal,” said Rick Meckler, a partner at Cherry Lane Investments in New Vernon, New Jersey. “The thought is that there will be some conciliatory moves from both sides, as news earlier in the week had investors worried that these talks might be moving in the wrong direction.” The S&P 500 and Dow Jones indexes looked set to break a three-week losing streak on optimism that the world’s top two economies could cool off their row before more U.S. tariffs kick in next week. Investors also moved into cyclical sectors such as financials .SPSY, ahead of the third-quarter earnings season set to begin with banks reporting next week. The S&P 500 bank index .SPXBK jumped 3%, on track for its best day in a month, on expectations that strength in mortgage banking and cheap valuations could provide support to some of the biggest U.S. lenders. However, analysts see S&P 500 earnings dropping 3.2% year-on-year, marking the first decline since 2016, according to IBES data from Refinitiv. Bets for another interest rate cut by the Federal Reserve fell amid data showing a rise in consumer sentiment for the month of October. Chipmakers with a sizeable exposure to China rose in early trading, with the Philadelphia Semiconductor index .SOX jumping 2.8%. Apple rose 2.1% as Wedbush raised its price target, citing confidence in the company’s new video streaming service. At 11:37 a.m. ET the Dow Jones Industrial Average .DJI was up 488.82 points, or 1.84%, at 26,985.49, the S&P 500 .SPX was up 54.18 points, or 1.84%, at 2,992.31 and the Nasdaq Composite .IXIC was up 159.43 points, or 2.01%, at 8,110.21. The industrial sector .SPLRCI gained 2.6%, boosted by a 17.7% surge in shares of Fastenal Co (FAST.O) after the industrial distributor beat quarterly profit expectations. Defensive utilities .SPLRCU was the only sector trading in the red, while consumer staples .SPLRCS and real estate stocks .SPLRCR posted the smallest gains, suggesting an uptick in risk appetite. Advancing issues outnumbered decliners for a 4.18-to-1 ratio on the NYSE and a 5.33-to-1 ratio on the Nasdaq. The S&P index recorded 25 new 52-week highs and no new low, while the Nasdaq recorded 41 new highs and 31 new lows. Reporting by Shreyashi Sanyal in Bengaluru; Editing by Shounak DasguptaOur Standards:The Thomson Reuters Trust Principles.

Source: Reuters

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