US shares gain on tech, energy stocks; trade woes hurt emerging markets

A broad index of world stock markets posted gains for a second straight day on Tuesday, as investors piled into US technology and energy stocks even as a trade war loomed.

MSCI's index of global equities <.MIWD00000PUS> gained 0.17 per cent as investors awaited action from US President Donald Trump after a deadline for public comment on additional tariffs on Chinese goods expired.

Wall Street continued its rally, with the benchmark S&P 500 stock index still on pace to deliver what once seemed improbable: a seventh year of double-digit percentage gains over the last decade.

Shares of Apple Inc surged 2.5 per cent a day ahead of the highly anticipated unveiling of the company's new iPhone models. Energy stocks got a boost from a rally in oil prices.

US job openings surged to a record high in July and more Americans voluntarily quit their jobs, pointing to sustained labour market strength and confidence that could soon spur faster wage growth. While that data may point to higher wages that could chip away at corporate profits, it also showcases a strong economy. Markets may see more stimulus this year from additional tax cuts being pondered by congressional Republicans.

The Dow Jones Industrial Average <.DJI> rose 113.99 points, or 0.44 percent, to 25,971.06, the S&P 500 <.SPX> gained 10.76 points, or 0.37 per cent, to 2,887.89, and the Nasdaq Composite <.IXIC> added 48.31 points, or 0.61 percent, to 7,972.47. [.N]

"The fact that Trump still hasn't announced the tariffs yet as expected has prompted a bit of cautious optimism, but it's not a problem that's going to go away," said CMC Markets analyst Michael Hewson.

Emerging Markets

Emerging markets remained under pressure, with an index of those countries' shares <.MSCIEF> down 0.66 per cent and touching their lowest level in nearly 16 months. Those markets' currencies <.MIEM00000CUS> are also at their lowest level in more than a year, with some near record lows against the US dollar. Copper, heavily consumed by emerging markets, lost 0.51 per cent to $5,880.00 a tonne.

China told the World Trade Organization on Tuesday it wanted to impose $7 billion a year in sanctions on the United States in retaliation for Washington's non-compliance with a ruling in a dispute over US dumping duties.

Trump told reporters on Tuesday that the United States was taking a tough stance with China, but he described trade talks with Canada as going well.

"Weakness is set to remain a recurring theme amid global trade tensions, a broadly stronger dollar and prospects of higher US interest rates," said Lukman Otunuga, a research analyst at broker FXTM. "With turmoil in Turkey and Argentina triggering contagion fears,  appetite for emerging market assets and currencies is likely to continue diminishing."

Oil prices ignored the threat to demand posed by a trade war that could slow economic growth, taking their cue instead from looming U.S. sanctions against Iran's petroleum industry that could hurt supply. [O/R]

US crude futures settled up 2.53 per cent at $69.25 per barrel and Brent rose 2.18 per cent to $79.06.

Bond markets worked to digest $144 billion in new supply from government auctions needed to finance U.S. deficit spending. Benchmark 10-year notes last fell 12/32 in price to yield 2.9792 per cent, from 2.937 per cent late on Monday.