Apple, Facebook propel Wall Street to three-week peak

A man looks at the screen of his mobile phone in front of an Apple logo outside its store in Shanghai, China July 30, 2017. REUTERS/Aly Song/Files Photograph:( Reuters )

Reuters New York, NY, USA Jan 09, 2019, 07.53 AM (IST)

The S&P 500 jumped to a three-week high on Tuesday, led by Apple, Amazon, Facebook and industrial shares on bets that the United States and China would strike a deal to end their trade war.

The three-day rally kicked off on Friday following robust US jobs data and dovish comments on interest rates by Federal Reserve chief Jerome Powell has lifted the S&P 500 by over 9 per cent from 20-month lows touched around Christmas.

The S&P 500 has gained in seven of the past nine sessions.

The United States and China will extend trade talks in Beijing for an unscheduled third day, a member of the US delegation said, as the world's two largest economies looked to resolve their bitter trade dispute. So far, officials from both sides have sounded optimistic, with President Donald Trump saying talks were going well.

"You're seeing some negotiations happen and the market is starting to think that perhaps we'll start to see a framework evolve," said Anik Sen, global head of equities at PineBridge Investments.

The trade-sensitive S&P industrials sector rose 1.41 percent. Boeing Co shares jumped 3.79 per cent, contributing the most to the Dow's rise, after the company said it had delivered a record 806 aircraft in 2018.

Apple Inc  rose 1.91 per cent, regaining some ground after the company last week warned of weaker-than-expected demand for its iPhones. But tech sector gains were limited by a drop in chip stocks after Samsung blamed an estimated 29 per cent drop in quarterly profit on weak chip demand.

The Philadelphia Semiconductor index slid 0.49 per cent. Adding to the woes, Goldman Sachs forecast a tough year for chipmakers, particularly in the first half.

Other investors remained upbeat about upcoming US quarterly results.

"It's the new year and investors are really stepping back and taking a look at the fundamentals, and realizing it's not as bad a story as maybe we thought toward the end of the year," said Jeff Kravetz, a regional investment strategist at U.S. Bank Wealth Management.

The communication services index climbed 1.58 per cent, with Facebook Inc adding 3.25 per cent after JPMorgan said the social media company was among its favourite internet picks for 2019.

Amazon.com Inc rose 1.66 per cent, increasing its market capitalization to $810 billion and cementing its position as the most valuable US company.

Story highlights

The three-day rally kicked off on Friday following robust US jobs data and dovish comments on interest rates by Federal Reserve chief Jerome Powell has lifted the S&P 500 by over 9 per cent from 20-month lows touched around Christmas