Facebook, Amazon buoy Wall Street as concerns ease
Facebook, Amazon and industrial stocks helped Wall Street extend its recovery yesterday as fears over a trade war between the United States and China eased.
Technology stocks, which have taken a beating in the past three weeks, were higher.
Facebook, Amazon, Alphabet, Netflix – collectively known as the “FANG” group – were up between 0.8% and 2.6%.
Shares of Boeing, Caterpillar – hit the most on Wednesday after China retaliated with $50-billion (R599- billion) in tariffs on US goods such as soybeans, cars, chemicals and some types of aircraft – also rose more than 1%.
At 9.41am ET, the Dow Jones Industrial Average was up 0.57% at 24 403.74. The S&P 500 rose 0.37% to 2 654.55 and the Nasdaq Composite gained 0.55% to 7 080.71.
The Dow bounced back from a 500-point drop on Wednesday after President Donald Trump’s top economic adviser, Larry Kudlow, said the administration was involved in a negotiation with China rather than a trade war.
“The bounce on Wednesday was really quite impressive, especially as there was not much of a catalyst for the turnaround given that neither the US [nor] China is backing down on tariffs, and negotiations were always going to take place in the background,” Oanda senior market analyst Craig Erlam said.
Investors also took comfort from the fact that the effective date of China’s move depended on when the US action took effect, providing room for manoeuvre.
Economic data yesterday showed the US trade deficit increased to a near 9½-year high in February, but the shortfall with China narrowed sharply.
While exports to China were unchanged in February, imports from the country declined 14.7%.
Facebook shares were up about 3% after chief executive Mark Zuckerberg said the company had not seen any meaningful impact on usage or ad sales since the data privacy scandal.
Wells Fargo rose 1% and Citigroup gained 1.5% after upgrades by UBS.
Advanced Micro Devices jumped 3.4% after Stifel upgraded to “buy”, while Micron Technology fell 3.7% after UBS started with a “sell” rating.