U.S. stocks claw back lost ground as China stabilizes currency

Stocks rose on Wall Street in afternoon trading Tuesday, placing the market on track to recoup some of its losses from a day earlier, when S&P 500 had its biggest decline of the year.

The modest bounce came as investors welcomed China’s decision to stabilize its currency, easing some of the pressure in its trade war with the U.S. The move suggests Beijing might hold off from aggressively allowing the yuan to weaken as a way to respond to U.S. tariffs on Chinese goods.

News that China allowed its currency to depreciate against the dollar to its lowest level in 11 years sparked Monday’s steep stock market sell-off, knocking the S&P 500 down 3%. The benchmark index had made up just under a third of those losses in afternoon trading Tuesday.

“We’re getting a nice move here, but if you look at what the tone of the market might be for the next few days it still could be under some pressure,” said Jeff Kravetz, regional investment director for U.S. Bank Wealth Management. “Right now investors are quite nervous and the reason for the nervousness is not only the trade issue, but we’re also seeing weakening economic data, not only here, but overseas.”

Technology stocks, which bore the brunt of Monday’s sell-off, helped drive the market’s broad gains Tuesday. Apple rose 1.3% and Microsoft added 1%. The companies get significant revenue from China and have been highly sensitive to swings in the ongoing trade dispute.

Communications services companies also notched solid gains. Facebook added 1.5%.

Industrials also rose. Aircraft components maker TransDigm jumped 13.7% after raising its profit forecast and delivering solid quarterly earnings.

Energy stocks dropped along with the price of crude oil. Materials sector stocks also fell.

A government report suggesting a cooling U.S. job market kept bond yields in check after an early gain. The yield on the 10-year Treasury briefly rose to 1.77%, but then declined to where it stood a day earlier at 1.73%.

Solid earnings results helped lift other sectors. Animal health company Zoetis climbed 6.8% and led health care stocks higher.

KEEPING SCORE: The S&P 500 index was up 0.9% as of 2 p.m. Eastern time. The Dow Jones Industrial Average rose 195 points, or 0.8%, to 25,913. The Nasdaq composite gained 1.1%. Stock indexes in Europe fell.

ANALYST’S TAKE: Investors are growing more anxious as the U.S. and China increase their trade war from a simmer to a boil and threaten global economic growth.

“What’s really come into the market and spooked investors is the sense that the stakes are rising again,” said James McCann, senior economist at Aberdeen Standard Investments.

The lingering trade dispute is looming over closely interconnected supply chains and other economies risk becoming collateral damage. Investors should be focusing on the trade dispute’s impact on the broader economy, including industrial production, along with business investment and sentiment, McCann said.

TOO BLAND: International Flavours & Fragrance tumbled 14.8% after the company trimmed its forecast following a disappointing earnings report. Profit and revenue came in below Wall Street forecasts during the second quarter. Its key food ingredients unit recorded a sales decline.

DRIVING GROWTH: Take-Two Interactive Software jumped 10% on a surge in sales of “Grand Theft Auto” and other popular video games. The company, which also makes the “Red Dead Redemption” games, beat Wall Street’s fiscal first quarter profit forecasts and gave investors a surprisingly good sales forecast for the current quarter.

Just Posted

Vikings Days a celebration of Danish immigration, culture

The Danish Canadian Museum near Dickson held its annual Viking Days celebration… Continue reading

Red Deer would be the site of potential TV show

A potential TV show aims to bring Red Deer kids across the… Continue reading

Oilsands firms considering diluent recovery units to boost crude-by-rail volumes

CALGARY — Ongoing pipeline project delays and growth in crude-by-rail capacity from… Continue reading

WATCH: ‘Lots to see and do’ at Pioneer Days in Red Deer

Sunnybrook Farm Museum is celebrating its 24th annual Pioneer Days this weekend.… Continue reading

Your community calendar

Thursday The Red Deer and District Garden Club hosts its annual Flower… Continue reading

Canada ‘disappointed’ terror suspect’s British citizenship revoked

OTTAWA — The United Kingdom is shirking its share of the international… Continue reading

Federal and provincial leaders to march in Montreal’s Pride parade

MONTREAL — A number of federal and provincial leaders are expected in… Continue reading

Regina woman suing after tip of son’s penis cut off in circumcision

REGINA — A Regina mother has filed a lawsuit alleging negligence after… Continue reading

Maxime Bernier tells party faithful he will make it into the leaders’ debates

OTTAWA — Maxime Bernier argued that not inviting him to take part… Continue reading

Alberta suspects lead Mounties on chase before their capture in Camrose

CAMROSE, Alta. — Mounties from the Wetaskiwin, Alta., detachment had their hands… Continue reading

Man dies in hospital after aggravated assault in Winnipeg, police say

Winnipeg police say a man is dead after he was allegedly assaulted… Continue reading

Advocates ‘internationalize’ the fight to free Raif Badawi from Saudi prison

MONTREAL — More than seven years after Raif Badawi was thrown in… Continue reading

Most Read