U.S. stocks couldn’t hang on to a big gain Wednesday, but they still finished broadly higher as technology and healthcare companies rose. That helped reverse some of the market’s big losses from last week.
Stocks initially rallied after the Wall Street Journal reported that China’s government could make changes to its Made in China 2025 economic development plan. That could be one step toward easing the trade dispute between the world’s two largest economies. The Dow Jones industrial average surged as much as 458 points in morning trading, but later gave back much of that gain.
“Any time you get some semblance of good news on trade, you’ve had this tendency to see a pretty sharp rally,” said Liz Ann Sonders, chief investment strategist for Charles Schwab.
After taking steep losses at the end of last week, stocks have gyrated this week: On Monday, they rallied to erase a big early loss. On Tuesday, a big morning gain turned into a small decline.
On Wednesday, most of the day’s gains evaporated in the second half of the trading session. The hour-to-hour changes reflect investors’ nervousness about the health of the global economy: Economic growth is expected to slow in 2019, and the U.S.-China trade war and rising interest rates could both make that slowdown more painful.
Sonders said investors overlooked those threats for a time but can’t ignore them anymore.
“Some of these intraday reversals have been quite extraordinary,” she said. “You have to go back to the financial crisis era to see such a big swing on consecutive days.”
The Standard & Poor’s 500 index rose 14.29 points, or 0.5%, to 2,651.07. The Dow ended up 157.03 points, or 0.6%, at 24,527.27. The Nasdaq composite climbed 66.48 points, or 0.9%, to 7,098.31. The Russell 2000 index of smaller-company stocks advanced 15.19 points, or 1.1%, to 1,455.32.
Among technology companies, chipmaker Broadcom climbed 3.3% to $254.98. Amazon rose 1.2% to $1,663.54 to lead retailers, and Netflix jumped 3.6% to $274.88 as internet and media companies joined in the gains.
Among industrials, machinery maker Caterpillar climbed 1.7% to $125.37 and equipment rental company United Rentals surged 6.3% to $108.30 after giving strong forecasts for 2019 and saying it would start buying back shares of its stock this month.
Through the Made in China 2025 initiative, Beijing aims to create leading companies in fields such as artificial intelligence, electric cars and robotics. The Trump administration says China’s government is unfairly subsidizing Chinese companies and discriminating against foreign rivals. Along with disputes over China’s handling of intellectual property, it’s a significant piece of the trade tensions between the countries.
Despite Wednesday’s gains, almost half of the 500 stocks that make up the S&P 500 have technically fallen into a bear market, meaning they have dropped at least 20% from their most recent peaks. The S&P 500 itself is down 9.5% from its record high in late September. The index’s last bear market ended in March 2009.
British legislators forced a no-confidence vote on Prime Minister Theresa May, threatening an end to her tenure, but she won the vote, which was conducted after the close of U.S. trading. Lawmakers in May’s Conservative Party have expressed frustrations over her negotiations of Britain’s departure from the European Union, and many of them want a cleaner break from the trading bloc. Opposition lawmakers don’t want Britain to leave the EU.
The uncertainty has knocked the British pound sharply lower in recent days, but the currency rose Wednesday to $1.2634 from $1.2527. London’s FTSE 100 stock index climbed 1.1%.
Deutsche Bank jumped after Bloomberg News reported that the German government might take steps to make it easier for the struggling bank to combine with competitor Commerzbank. U.S.-traded shares of Deutsche Bank gained 8.4% to $9.03, but they’re still down 52.5% this year and have fallen almost 80% over the past five years as the company reels from weak results and investments in Greek and Italian bonds that went bad. Commerzbank shares climbed 5.6% in Frankfurt.
Bond prices slipped. The yield on the 10-year Treasury note rose to 2.91% from 2.88%.
Tencent Music Entertainment, the largest music streaming service in China, climbed 7.7% in its first day of trading on the New York Stock Exchange. The company’s IPO of 82 million shares priced at $13 a share and closed at $14 a share.
Benchmark U.S. crude oil fell 1% to $52.15 a barrel in New York. Brent crude, the international standard, slipped 0.1% to $60.15 a barrel in London.
Wholesale gasoline fell 1.3% to $1.42 a gallon. Heating oil was flat at $1.85 a gallon. Natural gas dropped 6.1% to $4.14 per 1,000 cubic feet.
The dollar fell to 113.22 yen from 113.40 yen. The euro rose to $1.1367 from $1.1325.
The price of gold rose 0.2% to $1,250 an ounce, silver rose 1.5% to $14.85 an ounce and copper edged up 0.1% to $2.77 a pound.
The CAC 40 in France surged 2.1%. Germany’s DAX rose 1.4%. Japan’s benchmark Nikkei 225 jumped 2.2%. South Korea’s Kospi rose 1.4%. The Hang Seng in Hong Kong advanced 1.6%.