US stocks turn higher as anxious investors eye trade talks
By DAMIAN J. TROISE and ALEX VEIGA AP Business Writers
May 08, 2019 12:52 PM
FILE – In this March 11, 2019, file photo specialist Peter Mazza, left, and trader James Riley work on the floor of the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EDT on Wednesday, May 8.
Richard Drew, File
Stocks rose broadly on Wall Street in late-afternoon trading Wednesday, reflecting cautious optimism among investors ahead of the latest round of trade talks between the U.S. and China.
Financial markets turned volatile this week after President Donald Trump threatened to impose more tariffs on Chinese goods, a threat that is set to become reality early Friday. Negotiations between the U.S. and China are scheduled to continue in Washington on Thursday, and will include China’s top trade official.
Trump said on Twitter that China is coming “to make a deal” but that he’ll still be ready to raise tariffs if the negotiations fail to produce an agreement.
“The market right now is pricing in the assumption that a deal is going to be done,” said Jeff Zipper, managing director at U.S. Bank Private Wealth Management. “And if a deal is not done, you’ll see what the market could do based on yesterday’s price action.”
Wednesday’s modest gains followed a sharp pullback the day before as traders worried that a deal wouldn’t be reached before the tariff deadline and as animosity between the two sides appeared to escalate.
Investors have been anticipating a deal throughout this year, which contributed to double-digit gains in all the major indexes. But the latest tough talk is raising anxiety on Wall Street and casting more doubt about a resolution.
The U.S. government has filed plans to raise tariffs on $200 billion worth of Chinese imports from 10% to 25% Friday. If it follows through on those plans, it would mark a sharp escalation in the yearlong trade dispute that has raised prices on goods for consumers and companies.
Technology and health care companies accounted for much of the rebound. Utilities companies lagged the broader market. Chipmaker Advanced Micro Devices climbed 2.9%, while drugmaker Mylan gained 2.1%. NRG Energy fell 3.9% and TripAdvisor plunged after the vacation ratings company reported revenue that fell short of what analysts were expecting.
KEEPING SCORE: The S&P 500 index was up 0.1% as of 3:41 p.m. Eastern Time. The benchmark index fell 1.7% the day before.
The Dow Jones Industrial Average rose 49 points, or 0.2%, to 26,014. The Nasdaq composite was flat, while the Russell 2000 index of small company stocks slipped 0.3%.
Major stock indexes in Europe closed with modest gains.
ROUGH RIDE: Lyft slumped 10% after reporting a first quarter that was loss far wider than Wall Street had forecast. The ride-hailing company lost $1.1 billion in its first quarter as a public company, primarily because it paid out $894 million in stock-based compensation and related payroll taxes during its initial public offering. The report comes just days before the hotly anticipated IPO of Lyft’s much larger rival, Uber.
GOOD GAME: Electronic Arts rose 1.5% after the video game maker soared past Wall Street’s fiscal fourth quarter profit forecasts. The company also beat revenue forecasts. It launched several new games during the quarter, including “Apex Legends” as it competes with hit games like “Fortnite” from rival Epic Games.
FEELING CHIPPER: Qorvo climbed 5.7% after the chipmaker beat Wall Street’s fourth-quarter profit and revenue forecasts gave investors a strong forecast for the current quarter.
BAD TRIP: Investors punished TripAdvisor’s report of surprisingly low revenue during the first quarter. Analysts expected a gain. The company said international sales were softer than expected. The stock tumbled 11.7%.
NOT SO SLICK: Marathon Petroleum slid 6.8% after the oil refiner reported a surprise first quarter loss and announced the merger of two of its operations for $9 billion.