Markets joyfully closed higher on Sept 6th after the United States and China both agreed to resume trade negotiations early next month. Gains for the markets were also supported by a flurry of better than expected economic reports. The three major benchmarks ended in the plus.
The Dow Jones Industrial Average increased 1.4%, to close at 26,728.15. The S&P 500 increased 1.3% to close at 2,975.98. The tech-laden Nasdaq Composite Index closed at 8,116.83, gaining 1.8%. The fear-gauge CBOE Volatility Index (VIX) decreased 8.8% to close at 15.82. Advancers outnumbered decliners on the NYSE by a 1.95-to-1 ratio. On Nasdaq, a 2.70-to-1 ratio favored advancing issues.
How Did the Benchmarks Perform?
The Dow rose a plentiful 372.7 points to close in the green. Shares of Caterpillar CAT and Goldman Sachs GS rose 3.3% and 2.6%, respectively and supported gains for the 30-stock index of stocks.
The S&P 500 rose 38.2 points to end in positive territory. Of the 11 major sections of the S&P 500, eight ended in the green, with technology leading the advancers. The Technology Select Sector SPDR Fund (XLK) also rose 2.1% on Thursday.
Meanwhile, the Nasdaq gained 140 points to close in the green. Shares of Apple AAPL gained 2% and supported new gains for the Nasdaq. The stock carries a Zacks Rank #3 (Hold).
U.S. & China Agree to Resume Trade Talks in October
China’s ministry of commerce finally issued a statement on Sep 5 that leaders from the United States and China held a phone call related to trade talks and agreed to return to negotiations early next month. The statement also mentioned that China’s traqe mogel, Liu He spoke to U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin over the phone.
Further, both the parties mutually agreed to hold a fresh round of negotiations in Washington D.C. in October, per the commerce ministry statement.
Meanwhile, a U.S. Trade Representative spokesperson confirmed that a phone call was held. The spokesperson also mentioned that “agreed to hold meetings at the ministerial level in Washington in the coming weeks.” Such developments led to broad-based gains for the markets.
On the economic data front, ADP ADP stated that the private sector added 195,000 jobs in August to the U.S. economy, surpassing the estimate of an addition of 150,000 jobs. Meanwhile, U.S. factory orders surged 1.4% in July, surpassing the consensus estimate of 1%.
Further, the Institute of Supply Management’s (ISM) service index increased to 56.4% in August, beating the consensus estimate of 54.2% and previous month’s reading of 53.7%.