(Reuters) – U.S. stocks hit a one-month high on Thursday on hopes of a de-escalation in trade tensions after Washington and Beijing agreed to hold high-level talks next month, while strong economic data eased concerns of a domestic slowdown.
Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., September 5, 2019. REUTERS/Brendan McDermid
The benchmark S&P 500 .SPX surpassed its 50-day moving average, a key indicator for short-term momentum, and is now just 1.76% away from its record high.
Earlier, China’s Commerce Ministry said its trade team would lay the groundwork with their U.S. counterparts in mid-September for the October talks, providing relief for markets around the globe that have been bruised by the drawn-out trade war.
Technology stocks .SPLRCT provided the biggest boost to S&P 500, rising 1.72%, while financials .SPSY jumped 1.96%, the most among the 11 major S&P sectors.
Interest rate-sensitive banks .SPXBK surged 2.62%, following a rise in U.S. Treasury yields. [US/]
“The trade news was the spark that lit this rally and then the economic data extended it,” said Michael Antonelli, market strategist at Robert W. Baird in Milwaukee.
The ADP National Employment Report, considered a precursor to the Labor Department’s more comprehensive jobs report, showed U.S. private employers’ payrolls grew at the fastest pace in four months in August, led by big gains in service-sector jobs.
Another private survey showed growth in the U.S. services sectors accelerated in August, rebounding from its weakest level in nearly three years, as new orders rose to their highest level since February amid trade worries.
“Manufacturing is in a bit of a global slump, but if you look at the other economic data, like the services and jobs reports, none of them point to an economy that is teetering on a recession,” Antonelli said.
The upbeat reports eased concerns of an economic downturn, which was exacerbated by data on Tuesday that showed a contraction in U.S. factory activity in August. Investors will keep a close watch on the crucial nonfarm payrolls data due on Friday.
At 13:06 ET, the Dow Jones Industrial Average .DJI was up 392.12 points, or 1.49%, at 26,747.59, the S&P 500 .SPX was up 35.56 points, or 1.21%, at 2,973.34 and the Nasdaq Composite .IXIC was up 116.06 points, or 1.45%, at 8,092.94.
GRAPHIC: Markets indices – here
In deal news, insurer Prudential Financial Inc (PRU.N) agreed to acquire online insurance startup Assurance IQ Inc for $2.35 billion. Shares of Prudential fell 2.6%.
Among losers were the defensive utilities .SPLRCU, real estate .SPLRCR and consumer staples .SPLRCS sectors.
Advancing issues outnumbered decliners by a 1.95-to-1 ratio on the NYSE and by a 2.70-to-1 ratio on the Nasdaq.
The S&P index recorded 54 new 52-week highs and no new lows, while the Nasdaq recorded 67 new highs and 35 new lows.
Reporting by Uday Sampath in Bengaluru; Editing by Anil D’Silva and Arun Koyyur