Stock Market News For Apr 2, 2019

Markets closed in the green on Monday after investor sentiment was boosted by healthy manufacturing data from the United States and China. Further, China also announced that it would continue to reduce additional tariffs on U.S. autos in order to encourage trade talks between the United States and China. Meanwhile, Dow finished above the 26,000 level for the first time in more than a month.

The Dow Jones Industrial Average (DJI) increased 1.3%, to close at 26,258.42. The S&P 500 increased 1.2% to close at 2,867.19. The tech-laden Nasdaq Composite Index closed at 7,828.91, gaining 1.3%. The fear-gauge CBOE Volatility Index (VIX) decreased 1.6% to close at 13.49. Advancers outnumbered decliners on the NYSE by a 2.66-to-1 ratio. On Nasdaq, a 1.99-to-1 ratio favored advancing issues.

How Did the Benchmarks Perform?

The Dow amassed 329.7 points to close in the green. Gains for the 30-stock index were propelled by a rally in shares of United Technologies (NYSE:UTX) , JPMorgan Chase (NYSE:JPM) and Caterpillar (NYSE:CAT) , which gained 3.3%, 3.4% and 3.5%, respectively. The Dow closed above the 26,000 level for the first time since Feb 26.

The S&P 500 rose 32.2 points to also end in the green. Of the 11 major sectors of the S&P 500, eight ended in positive territory, with financials and industrials shares leading the advancers. The Financial Select Sector SPDR Fund (XLF) and Industrial Select Sector SPDR Fund (XLI) increased 2.5% and 2.1%, respectively on Monday.

Meanwhile, the Nasdaq increased 99.9 points to close in positive territory. Gains for the tech-laden index were supported by a rally in FAANG stocks. Shares of Facebook (NASDAQ:FB) , Apple (NASDAQ:AAPL) , Amazon (NASDAQ:AMZN) , Netflix (NASDAQ:NFLX) and Alphabet (NASDAQ:GOOGL) rose 1.2%, 0.7%, 1.9%, 2.9% and 1.9%, respectively. The stock carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Manufacturing Activity Gathers Steam in U.S. and China

Market watchers were enthused by the release of upbeat manufacturing data from both the United States and China. Per the latest report from the Institute of Supply Management (ISM) on Apr 1, its U.S. manufacturing index for the month of March increased to 55.3, up from 54.2 in the previous month. The consensus estimate for the period was 54.5.

Coming to China, its official PMI, released on Mar 31, increased to 50.5 in March from 49.2 in the previous month. This also marked the metric’s highest settlement in the past six months. Also, the Caixin China manufacturing purchasing managers index increased to 50.8 in March from 49.9 in February.

Meanwhile, IHS Markit’s eurozone PMI fell to 47.5 in March, indicating that the Eurozone continued to reel under the pressure of its economic woes.

China to Nix Additional Auto Tariffs on U.S. Vehicles

On Mar 31, Reuters reported that China’s State Council had announced on Sunday that the Asian country would continue to “suspend additional tariffs” on U.S. automobiles and auto parts. Further, the report also mentioned that the motive behind such a move was to “create a good atmosphere for the continuing trade negotiations between both sides.”

Talks between dignitaries from both the countries will resume on Apr 3 in Washington. The Chinese delegation would be led by vice premier Liu He.

Economic Data

On the economic data front, U.S. retail sales for the month of February, declined 0.2%. Meanwhile, retail sales excluding automobiles fell 0.4% in February.

U.S. business inventories increased 0.8% in January, higher than the consensus estimate of 0.4%. Further, U.S. construction spending increased 1% in February.

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