Stocks gain as traders await cues on US-China trade developments
- Stocks rose on Wednesday as investors waited for signs of progress toward a trade deal between the United States and China.
- Traders appeared to shrug-off a slump in the pound that was sparked by UK Prime Minister Boris Johnson's request to suspend Parliament ahead of Brexit.
- A boost in oil prices fueled a jump in energy stocks, which led the S&P 500 index with a gain of 1.4%.
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Stocks gained on Wednesday as traders awaited a signal on any advancements in the trade spat between the US and China.
Energy stocks led the S&P 500 as a jump in oil prices fueled a 1.4% gain. WTI crude climbed 1.8%, while brent crude rose 1.6%. Financial stocks jumped 0.9%, rebounding from a loss on Tuesday prompted by another inversion of closely-watched segment of the so-called yield curve.
"It's a day where you have a little bit up across the board and you don't have anything hurting too badly," JJ Kinahan, the chief market strategist at TD Ameritrade, said in an interview with Markets Insider.
Kinahan also pointed out that there weren't any big stocks experiencing significant sell-offs, which can sometimes lead to losses in specific sectors and the major indexes.
US markets appeared to shake-off a slump in the pound provoked by UK Prime Minister Boris Johnson's motion to suspend Parliament, which stoked fears of no-deal Brexit.
The twists and turns in the alleged communication between China and the US regarding a trade deal has kept investors on edge over the last few days as well. On Monday, President Trump claimed Chinese officials made phone calls to members of his administration over the weekend seeking to restart negotiations for a trade deal.
China's Foreign Ministry spokesman said on multiple occasions that he wasn't aware of the phone calls Trump was referring to, and the country has yet to confirm the communications oc cured.
Here's a look at the major indexes as of the 4 p.m. close on Wednesday:
- The S&P 500 increased 0.65%, to 2,887.94.
- The Dow Jones Industrial Average rose 1%, to 26,036.10.
- The Nasdaq Composite climbed 0.38%, to 7,856.88.
Shares of Tiffany & Co. rose as much as 4.7% after the company posted a stronger profit than analysts expected for the second quarter. The luxury jeweler said its global revenue fell about 3% as international tourists spent less on high-end goods while visiting the US due to a strengthening dollar.
Purdue Pharma is reportedly considering paying-out between $10 billion and $12 billion to settle more than 2,000 opiod crisis lawsuits in a deal that would bankrupt the company. The news comes a day after Johnson & Johnson was ordered by an Oklahoma judge to pay a $572 million penalty for its contribution to the opiod crisis.
Within the S&P 500, these were the largest gainers:
- Cimarex Energy: 10.6%
- Coty: 6%
- Diamondback Energy: 4.6%
And the largest decliners:
In addition to gains in financials and energy stocks, consumer discretionary and industrials increased by more than 1%. Utilities posted the only loss in the S&P 500 on Wednesday, sinking about 0.3%.