Wall Street stages ‘relief rally’

Specialist Peter Mazza works on the floor of the New York Stock Exchange during Thursday’s sell-off. Markets were recovering early Friday. (AP Photo)

NEW YORK: US stocks surged early Friday, joining a global rally in equities after two days of market tumult as trade tensions between the US and China seemed to ease.

Officials of the two countries plan to meet in November, while the Treasury Department said that China is not manipulating its currency to help its exports, as Donald Trump has frequently alleged. Treasuries slipped, the dollar was steady and West Texas Intermediate crude oil climbed above $71 a barrel.

All major US benchmarks were up at least 1.5% by early evening Thailand time. The SP 500, looking to snap a six-day losing streak totalling 6.8%, climbed the most since April.

Technology stocks  drove the strength as the Nasdaq 100 Index jumped more than 2%. Banks were among the best performers as JPMorgan Chase, Citigroup and Wells Fargo kicked off the third-quarter earnings season with mostly positive results.

Strong trade data from China also buoyed markets, with the MSCI Asia Pacific Index rising from the lowest level since May 2017. China trade data showed exports rebounded, while imports remained robust, thanks to strong demand at home and abroad despite worsening relations with the US.

That eased some concern about the impact of the trade war, which had contributed to the worst equity sell-off since February amid worries about the policy path of the US Federal Reserve.

Emerging-market stocks headed for the biggest gain in more than two years as risk appetite improved, and most developing-nation currencies advanced against the dollar. The Stoxx Europe 600 index gained for the first time in three days, with miners leading the advance and most sectors in the green, though the gauge is still headed for its worst week since February.

Meanwhile, as traders debate whether the correction has created immediate buying opportunities, earnings remain key as third-quarter reports from US companies will show whether the Trump Administration’s tax breaks are still boosting corporate profits.

“We expect further volatility and possible additional down moves,” though “the bear checklist is not yet flashing red,” Pascal Blanque, chief investment office at Amundi SA, said in a note to clients. “The focus will be on the US earnings season, so any news will be carefully assessed by the market.”

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