S&P 500 Climbs on Strength in Industrial Sector
11 Februar 2019 - 5:24PM
Dow Jones News
By Akane Otani and Michael Wursthorn
Rising shares of industrial companies pulled the S&P 500
slightly higher Monday, even as trade tensions simmered ahead of
another round of negotiations with China.
Aluminum-parts manufacturer Arconic and railroad company Norfolk
Southern rose more than 2% in early trading, triggering more modest
gains throughout the S&P 500's industrial sector. Corporate
news out of those companies precipitated the moves -- Arconic said
Friday it would spin off one of its main two businesses, while
Norfolk Southern unveiled a strategic plan that included boosting
its dividend.
But the stock market's gains appeared to be tempered by the
possibility of renewed trade tensions between the U.S. and China.
Investors are starting the week with a close eye on trade talks
between Washington and Beijing, with U.S. Trade Representative
Robert Lighthizer and Treasury Secretary Steven Mnuchin landing in
Beijing Monday and scheduled to meet with China's vice premier
later in the week.
The talks could spark fresh volatility for financial markets.
Stocks rose in January on fresh hopes that the U.S. and China would
be able to carve out a trade deal, but some of that optimism
appeared to lose steam last week as investors parsed a stream of
downbeat economic data.
"There's this belief that this is going to very quickly resolve
itself, and I think the reality is that there are very complicated
long-term issues on the trade relationship between the two most
powerful economies around the world," said Jonathan Golub, chief
U.S. equity strategist at Credit Suisse.
Although economic growth in the U.S. still looks relatively
steady, Mr. Golub cautioned that an unexpected breakdown in trade
talks remain a major market risk.
"I'm actually quite optimistic about the broad backdrop -- but
that doesn't mean that there's no risk," he said.
The S&P 500 rose 0.1% in recent trading, paring some of its
earlier gain. The Dow Jones Industrial Average turned negative
after opening higher, and was recently down 33 points, or 0.1%, to
25072. The Nasdaq Composite has held on to its gain, and was up
0.2%.
Industrial stocks in the S&P 500 were the chief contributor
the broad index's small gain Monday. Norfolk Southern added 3.5% to
lead the sector higher after it unveiled a strategic plan focused
on increased productivity and revenue growth, as well as achieving
a dividend payout ratio of 33%.
Arconic rose 2.1% after the company said Friday that it would
spin off either its aluminum-sheet rolling or aerospace-components
unit.
Weighing on major index's were small declines among energy and
health-care stocks, as well as shares of utility companies.
Although the pace of earnings releases has begun to slow down,
investors are expecting to get quarterly results from companies
including Vornado Realty Trust and Everest Re Group after the
closing bell Monday.
Elsewhere, the Stoxx Europe 600 rose 0.8%, while major indexes
in Asia ended mixed.
Data Monday showed U.K. gross domestic product grew last year at
the slowest pace since 2012. The British pound fell to session lows
following the report, although it pared its losses to trade down
0.1% against the U.S. dollar. The FTSE 100 -- whose multinationals
tend to benefit from a weaker pound -- rose 0.3%.
In Asia, the Shanghai Composite jumped 1.4% to a two-month high,
while Japan's Nikkei Stock Average was shut for a holiday and Hong
Kong's Hang Seng rose 0.6%.
Write to Akane Otani at akane.otani@wsj.com and Michael
Wursthorn at Michael.Wursthorn@wsj.com
(END) Dow Jones Newswires
February 11, 2019 11:09 ET (16:09 GMT)
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