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Wall Street eyes fourth day of gains on U.S.-China trade deal hopes

Reuters 

By Sruthi Shankar

(Reuters) - U.S. stock index futures rose on Wednesday, setting up for a fourth straight day of gains, as rising expectations of a trade deal between the and China boosted demand for risk assets across the world.

Both countries ended their talks in that lasted longer than expected and officials said details will be released soon, raising hopes that an all-out trade war that could badly disrupt the global economy can be averted.

Optimism over the trade negotiations, health of the U.S. economy and Federal Reserve Jerome Powell's dovish remarks on interest rates have sparked a rally that has lifted the S&P 500 9.5 percent from the 20-month low it hit around

Shares of Boeing Co, which is sensitive to trade-related news, were up 0.9 percent in premarket trading. Shares of companies such as and rose about 1 percent, as a rally in extended for the eighth straight day.

Amazon.com Inc, now the most valuable U.S. company, gained 0.7 percent. The online retailer's three-day surge has fueled the market's recent rally.

"There's a solid uptrend that's come off the Eve downturn. So any development that looks like it might be leading to an eventual resolution will be helpful to the markets," said Randy Frederick, vice of trading and derivatives for in Austin,

"It's likely that we'll see a similar leadership (from the past three days). The high-profile names that tend to move the most, do in both direction."

But threatening to weigh on sentiment was the partial shutdown that entered its 19th day as Democratic lawmakers and the remain divided over Donald Trump's demand for money for a border wall.

warned it could cut the country's coveted triple-A sovereign credit rating later this year if the shutdown leads to it hitting its debt ceiling and hampering budget setting.

At 8:44 a.m. ET, Dow were up 126 points, or 0.53 percent. S&P 500 were up 11.5 points, or 0.45 percent and Nasdaq 100 were up 31.75 points, or 0.48 percent.

was flat, giving up early gains after a Nikkei Asian Review report that the company had reduced planned production for its three new models for the January-March quarter.

The company had warned on holiday quarter sales last week, hammering its stock as well as those of its suppliers, mostly chipmakers. The sector also got a beating on Tuesday after flagged weak chip demand.

Those warnings have raised concerns about profit growth in the S&P tech sector, which has powered the decade-long bull market on

A slowdown in S&P companies' profit growth in the fourth quarter, during which the index plunged about 14 percent, have largely been factored in, but the warning from Apple, the trade war and fading tailwinds from tax cuts have made investors more fearful of shrinking profits this year.

(Reporting by in Bengaluru; Editing by Sriraj Kalluvila)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, January 09 2019. 19:58 IST
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