US open: Strong start on the Street as White House extends an olive branch to China
By Iain Gilbert
Date: Thursday 16 Aug 2018
(Sharecast News) - Wall Street trading started off strong on Thursday following heavy losses in the previous session, as investors welcomed the latest development in US-China trade relations.
At 1540 BST, the Dow Jones Industrial Average was trading 1.31% higher at 25,492.96, while the S&P 500 had gained 0.77% to 2,839.99 as the Nasdaq moved 0.78% firmer to 7,835.12.
The mood was lifted after China's Ministry of Commerce said a Chinese delegation led by vice commerce minister Wang Shouwen will travel to the US for talks in late August. The talks, which are at the invitation of Washington, will be held with US Under Secretary of Treasury for International Affairs, David Malpass.
Meanwhile, Qatar's pledge late on Wednesday to invest $15bn in Turkey's bank and financial markets was also continuing to underpin sentiment.
Neil Wilson, chief market analyst at Markets.com, said, "Qatar has emerged as a white knight coming to the rescue with a pledge of $15bn investment in Turkey. This has helped ease concerns, but in the wider market the push back against the dollar's rally seems to be the result of news China and the US will hold high-level trade talks later this month."
In corporate news, Tesla dipped 0.33% following a report that US regulators are looking to question executives about the company's privatisation plans.
Amazon ticked ahead 1.10% after rumours began to circulate that the online retailer was said to be considering the creation of a UK insurance price comparison website.
Walmart surged 9.62% at the open as its second-quarter earnings beat expectations, while Cisco Systems gained 3.70% after its quarterly numbers beat views and the company forecast first-quarter sales above estimates.
Chip makers Nvidia Corp and Applied Materials are slated to report earnings after the close.
On the data front, the number of Americans filing for unemployment benefits fell last week, according to figures from the Labor Department.
US initial jobless claims dropped by 2,000 to 212,000 from the previous week's level, which was revised up by 1,000. Analysts had expected claims to rise to 215,000.
Meanwhile, the four-week moving average rose by 1,000 to 215,500 from the previous week's average, which was revised up by 250.
Elsewhere, homebuilding in the States slowed down sharply in July with the details of a government report pointing to scant upside going forward, according to economists.
According to the Department of Commerce, housing starts grew by 0.9% month-on-month to reach an annualised pace of 1.168m, which was well short of economists' expectations for a reading of 1.273m.
Lastly, manufacturing activity in the US mid-Atlantic region slowed sharply in August, according to the results of one of the most widely-followed surveys for the sector.
The Federal Reserve Bank of Philadelphia's Manufacturing Business Outlook index slumped from a reading of 25.7 in July to 11.9 for August.
Economists had forecast a reading of 22.0.
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