Dow gains 200 points as strong earnings overshadow China trade fight, Bank of America rises
Stocks rose Wednesday as a slate of stronger-than-anticipated earnings overshadowed worries about growing trade tensions with China.
The Dow Jones Industrial Average climbed 209 points, or 0.5%. The S&P 500 gained 0.7%, while the Nasdaq Composite advanced nearly 1%.
Bank of America shares jumped 4% after the company posted third-quarter earnings and revenue that beat analyst expectations, thanks to strong investment banking revenue. Morgan Stanley also posted better-than-expected earnings, sending its shares higher by 6%.
Those reports come after a spate of better-than-expected reports from Goldman Sachs and Wells Fargo, among others, on Tuesday.
Still, Wall Street veteran Art Hogan believes that stocks will likely trade sideways from here, wavering near all-time highs as long as trade war uncertainty persists. The chief market strategist at B. Riley Wealth Management also said the U.S. government shutdown is another headwind for the market.
Trade fears led to a tumultuous session on Tuesday. The S&P 500 attempted a comeback, but ultimately closed lower after President Donald Trump threatened China with a cooking oil embargo late in the session as retaliation for Beijing not buying U.S. soybeans. On Tuesday, the benchmark was up as much as 0.4% and down as much as 1.5%.
The Nasdaq fell but closed well off the lows. The Dow bucked the trend to rise just over 200 points, although it had fallen as much 1.3% on Tuesday morning.
Tuesday’s news was the latest ramp-up in trade tensions between the U.S. and China. On Monday night, China put new sanctions on five U.S. subsidiaries of South Korean shipbuilder Hanwha Ocean. This followed Trump’s threats last Friday to place an additional 100% tariff on any goods coming from China after Beijing imposed strict export controls on rare earth minerals. Trump’s tariffs could go live on Nov. 1 or sooner, depending on China’s next move, U.S. Trade Representative Jamieson Greer told CNBC Tuesday.
Source : Cnbc.com
