American stocks move mostly higher; Dow jumps 400 points
NEW YORK (AP) – US stocks largely headed higher at midday trading on Wall Street Tuesday, as investors ate optimistic comments on Mexico trade, along with a technology sector recovery and an encouraging signal from Federal Reserve Chairman Jerome Powell.
Mexican Foreign Minister Marcelo Ebrard said Mexico is likely to enter into an agreement with the United States when officials meet on Wednesday and stave off US plans to set 5% tariffs on Mexican goods. President Donald Trump plans to impose tariffs starting on June 10 as part of a wider immigration dispute.
The threat of a trade battle with Mexico comes with investors who are already worried about a growing trade war between the US and China. The stock market suffered its first monthly loss of the year in May, when investors fled to safer holdings as bonds.
At the same time, Powell Fed said "closely monitor" trade developments and would "act as appropriate" to sustain US economic expansion, a signal the Fed would be prepared to cut prices if needed. Some investors even begin to bet that Fed's next move will be a fall in prices later this year.
The technology file recovered and helped drive the wider market higher. On Monday, technology companies went over concerns that more major internet companies could face more scrutiny from antitrust regulators.
Chipmakers were all pretty much higher. Micron rose 5.2% and Texas Instruments rose 3%. Other technology companies rallied. Microsoft rose 2.2% and Apple rose 3.6%.
Facebook made the market and fluctuated between small gains and losses. An EU Supreme European Union Legal Adviser said social media could be ordered to take down anywhere in the world any text, photo or other media considered to be defamatory by a court.
Banks also gave gains that lower bond prices pushed returns on the 10-year treasury higher. Banks benefit from higher returns because they can charge more interest on loans. Bank of America increased by 4.1% and Citigroup rose 4.8%.
Utilities put the market in another sign that investors moved funds from safe-play companies and to risky but potentially more profitable investments.
HOLDING SCORE: The S & P 500 index increased by 1.5% from 9 am 11.30 East time. The Dow Jones Industrial Average increased 426 points, or 1.7%, to 225,245. The technological heavy Nasdaq composite rose 1.9%.
OVERSEAS: European stocks largely rose after a report that unemployment fell to its lowest level for more than a decade in the 19 countries using the euro. Germany's DAX jump 1.5% and CAC 40 in France increased 0.5%.
FED FEEDS HOPES: Chairman Jerome Powell said the Federal Reserve is prepared to respond to the Trump administration's trade conflicts to protect the US economic expansion if it decides it would be necessary. The current expansion next month will be the longest period of uninterrupted growth in American history, surpassing the 10-year expansion in the 1990s.
"We don't know how or when these issues will be resolved," Powell said in his comments. "We closely monitor the consequences of this development for the US economic outlook, and as always, we will act as appropriate to maintain the expansion."
The market's robust early gains this year were partly driven by the Fed's movement to take a more patient approach to interest rate policy for ever-increasing prices over two years. Investors have hoped it will go further and cut interest rates to bring economic growth to another press.
BOXED IN: Online storage provider Box fell 7.9% after giving investors a weak revenue outlook for the year. The company cited a shift to longer sales cycles. The company also said it did not make sense to provide a timeframe to reach a milestone of $ 1 billion in earnings.
LINGERING LUSTER: The luxury goldsmith Tiffany rose 5.4% after beating Wall Street's first-quarter earnings forecast. Investors focused on the solid performance figures in a very mixed report.
A key factor measured by sales of established stores was short of forecasts, and Tiffany warned that higher charges from the charges could cut profits.
TRANSFORM DRUGSTORES: CVS Health increased 4.1% after it was scheduled to add more health services, including medical equipment and dieticians to more than 1,500 stores over the next few years. The transformation will also include space for an occasional yoga class.
The transformation is part of a broader trait in pharmacies to expand services as they compete more intensively for customers' healthcare systems. Rival Walgreens is already experimenting with adding primary care offices to their stores. The company's share rose 3.2%.
