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Wall Street indexes rose amid optimistic trade news

Wall Street indexes rose on Wednesday after signs for delaying Fed's monetary policy tightening and improving trade relations with China.

Wall Street rose

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Wall Street indexes rose in the volatile session on Wednesday following the publication of the report of the last Federal Reserve meeting. The document says that the Fed could “afford to be patient to further tighten monetary policy”.

The blue-chip index Dow Jones Industrial Average grew by 91.67 points, which is a fourth consecutive winning session. The broader index S&P 500 rose by 0.4%, with the technology and energy sectors being the best performers. The technology benchmark Nasdaq Composite moved upward for the fourth consecutive day by 0.87%.

Nasdaq index

The indexes lost part of their earlier gains in the last one hour of trade after the canceled meeting between Democratic Party leaders and President Donald Trump. The head of state wrote on Twitter that “the meeting is a waste of time”. Senator Chuck Schumer said the president had left the meeting.

However, the President’s reaction had a slight negative effect on the market.

Investors also focus on the US-China trade talks, which ended on Wednesday. The negotiators prolonged their conversations one more day after reaching some progress in certain areas. China’s foreign ministry said on Wednesday that the talks are over and the results will be published shortly. President Donald Trump wrote on Tuesday: “The talks with China are going very well”.

Meetings this week were the first among the two sides since Donald Trump and Chinese President Xi Jinping agreed on a 90-day ceasefire in December.

Meanwhile, Fitch has threatened to lower the US Treasury’s credit rating because of ongoing problems surrounding the federal budget’s adoption and the likely negative consequences that may follow for the debt ceiling.

The partial cessation of the work of federal agencies is on its 19th day today. The main reason for this is the lack of reconciliation of state budgets by Democrats and Republicans because of the desire of the US President Donald Trump to include the cost of building a wall along the border with Mexico.

The two most traded oil varieties, WTI and Brent, recorded strong increases at the end of the session by more than 4% to 52.25 USD per barrel and 61.37 USD per barrel respectively. Gold also increased its price by 0.66% to 1,294.40 USD per ounce.

Corporate performance

The shares of Caterpillar rose by 0.4% and Boeing added nearly 1% thanks to optimism about trade talks, as the two companies are heavily dependent on foreign markets.

The automakers also performed well, on the background of improving US-China trade relations. The stocks of General Motors added over 1% to their value, while Ford appreciated by 4%.

The technology stocks performed well. The Apple raised its market capitalization by 1.7%, while Facebook shares appreciated by 1.7%. Other technology companies from FAANG did not found single direction. Netflix and Alphabet ended the session with a minimum loss, while Amazon registered a slight increase.

Corporate earnings reports

The international beverage alcohol company Constellation Brands cut 2019 guidance to account for its Canopy Growth Corp investment. Considering interest expenses for Canopy financing, the company now projects 2019 earnings per share between 9.20 USD and 9.30 USD against a previous Street estimate of 9.43 USD. The figures exclude Canopy’s fourth-quarter equity earnings. Constellation Brands expect the powerful cash generation capability of our core business to enable significant cash returns of 4.5 billion USD to shareholders in the form of share repurchases and dividends within the next three fiscal years.

Schnitzer Steel reported better than expected FQ1 earnings and a 17% YoY increase in revenues to 564 million USD. The company’s ferrous sales volumes rose by 15% YoY, primarily due to stronger domestic demand and commercial initiatives to increase supply flows. The average ferrous net selling prices rose by 5%, or 14 USD/ton.