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Stock Market News For Apr 4, 2019

Zacks Equity Research
Markets closed the session in positive territory on Wednesday as investors were buoyed by positive developments on the U.S.- China trade war front.

Markets closed the session in positive territory on Wednesday as investors were buoyed by positive developments on the U.S.- China trade war front. Reports surfaced that a trade deal between the countries had almost been finalized with only a few differences remaining. Further, strong service sector data from China also boosted investor sentiment.

Meanwhile, weak economic reports domestically weighed on the markets, however, investors played down the fears. The three major benchmarks ended in the green.

The Dow Jones Industrial Average (DJI) increased 0.2%, to close at 26,218.13. The S&P 500 increased 0.6% to close at 2,873.40. The tech-laden Nasdaq Composite Index closed at 7,895.55, gaining 0.6%. The fear-gauge CBOE Volatility Index (VIX) increased 3.7% to close at 13.86. Advancers outnumbered decliners on the NYSE by a 2.32-to-1 ratio. On Nasdaq, a 1.86-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow gained 39 points to close in the green. Gains for the 30-stock index were propelled by a rally in shares of Intel Corporation INTC and Home Depot HD, which gained 2.1% and 2.2%, respectively.

The S&P 500 rose 6.2 points to also end in the green. Of the 11 major sectors of the S&P 500, five ended in positive territory, with materials and technology shares leading the advancers. The Materials Select Sector SPDR Fund (XLB) and Technology Select Sector SPDR Fund (XLK) increased 1.3% and 0.8%, respectively on Wednesday.

The broader index closed 2% below its all-time high of 2,930.75, which it had touched on Sep 30, 2018. Also, this marked the S&P 500’s fifth straight session of gains.

Meanwhile, the Nasdaq increased 46.9 points to close in positive territory. Gains for the tech-laden index were supported by a rally in of 8.5% in the shares of Advanced Micro Devices, Inc. AMD. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Optimism Around U.S. – China Trade Talks Boost Markets

Per a report by Financial Times, trade negotiations between the United States and China are almost over. The report quoted executive vice president for international affairs at the U.S. Chamber of Commerce, Myron Brilliant as saying that almost 90% of the deal is done, but the last 10% is the hardest part, it’s the trickiest part and it will require trade-offs on both sides.”

Discussions between the two countries were scheduled to begin on Apr 3 in Washington. Chinese vice premier Liu He was prepared to meet U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to discuss the future of trade relations between the two countries. Such positive developments on the trade war front led to a broad-based rally in the markets.

Investors Rejoice Upbeat Economic Data from China

Caixin’s China services purchasing managers index, a measure of the Asian giant’s private sector performance, increased to 54.4 in March, a 14-month high. The rise was supported by a gain in new export orders. Market watchers welcomed such developments.

Economic Data

On the economic data front, ADP ADP reported that the U.S. private sector added 129,000 jobs in March, versus an expectation of 165,000 jobs. This also marked the metric’s weakest reading in the last 18 months.

Meanwhile, ISM’s Service Index fell to 56.1% in March from 59.7% in February. The consensus estimate for the period was 57.6%.

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