Wall Street managed to end on a green territory after a volatile trading session on Monday, as investors followed the latest developments in US-China trade talks, and shares continued their rally.
The blue-chip index Dow Jones Industrial Average rose by 99 points after dropping by more than 100 points at the first trading hours. At one point, the benchmark rose by more than 250 points to reach its highest value for the day.
The broader index S&P 500 recorded an increase of 0.7%, driven by the consumer goods sector, which expanded by 2.37%.
The technology index Nasdaq Composite expanded by 1.26% after Amazon’s shares rose by more than 3% and the company became the world’s leader in market capitalization.
The energy sector in the S&P 500 was among the best performing on Monday with a growth of 1.3%. Cabot Oil and Hess led the sector and their shares rose by more than 4%. The energy companies were supported by the 1.2% increase in US oil prices.
According to the investors, the January effect is likely to continue, but the market will remain volatile as long as trade negotiations continue. Any signal that trade negotiations are going well can send the market up.
Amazon shares rose after the Pivotal Research Group changed its rating for the company to “Buy”. The analytical company said that Amazon’s capabilities this year are “generally unlimited”, adding that the stock’s price could jump by 20%.
On bond markets, the government bond yields rose slightly on Monday amid trade talks, stable employment data, and Federal Reserve comments last week. The yields on 10-year government bonds rose to about 2.68% and the returns on 30-year government securities rose to 2.983%.
On forex markets, the US dollar weakened, squeezed by rising expectations that the Federal Reserve would pause or stop tightening the monetary policy and raising interest rates. The dollar index, measuring the value of the greenback against a basket of currencies, fell by 0.47% to 95.73 points, close to its lowest level of two and a half weeks last week.
The crude oil prices rose on Monday, recovering from its lowest levels for the past year and a half, reached in December. The market was supported by the OPEC+ quota deal and stabilizing stock markets. The futures on US crude oil WTI ended the session with an increase of 0.56 USD, or 1.2%, up to 48.52 USD per barrel. The contracts on the Brent variety rose by 0.27 USD, or about half a percent, to 57.33 USD per barrel.
The price of gold also rose, remaining close to its six-month high in the previous session. The futures on precious metal rose by 4.10 USD to 1,289.90 USD per ounce.
Notable Earnings Reports
Commercial Metals announced financial results for its fiscal first quarter ended November 30, 2018. The earnings from continuing operations were 19.4 million USD, or 0.16 USD per diluted share, on net sales of 1.3 billion USD. First quarter results include net after-tax expenses of 22.1 million USD related to certain non-operational costs. However, the earnings per share missed the analysts forecasts for 0.24 USD per share.
The liquidity position of Commercial Metals at November 30, 2018, remained strong with cash and cash equivalents of 52.4 million USD and availability under the company’s credit and accounts receivable sales facilities of 626.8 million USD.