(Reuters) – U.S. stocks rose on Friday and were on track to end a bruising week on a positive note, bolstered by hopes of more stimulus from central banks to perk up slowing growth.
FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., August 14, 2019. REUTERS/Eduardo Munoz
The three main Wall Street indexes extended gains after a report that Germany’s right-left coalition government would be prepared to ditch its balanced budget rule and take on new debt to counter a possible recession.
“This is huge news from a European perspective,” said Brad McMillan, chief investment officer of Commonwealth Financial Network in Waltham, Massachusetts.
“One of the major constraints on ECB action has been the German position and for this to change domestically certainly is going to help.”
The report added to sentiment after China’s state planner said it would roll out a plan to boost disposable income this year and in 2020 to spur consumption as the economy slows.
Investors are also expecting further interest rate cuts from the Federal Reserve.
However, the three main indexes are still set to rack up their third consecutive week of losses, on worries of a recession and U.S.-China trade tensions.
At 11:22 a.m. ET, the Dow Jones Industrial Average .DJI was up 280.67 points, or 1.10%, at 25,860.06 and the S&P 500 .SPX was up 39.03 points, or 1.37%, at 2,886.63. The Nasdaq Composite .IXIC was up 126.88 points, or 1.63%, at 7,893.50.
All of the 11 major S&P sectors were higher, with technology stocks .SPLRCT providing the biggest boost.
Sectors seen as bond proxies due to their high dividend yields – real estate .SPLRCR and utilities .SPLRCU – posted small gains.
Among stocks, Nvidia Corp (NVDA.O) jumped 6.2% after posting better-than-expected quarterly profit and revenue, lifting the Philadelphia chip index .SOX 2.51%.
Applied Materials Inc (AMAT.O) fell 1.8% after chip gear maker cautioned that recovery in the memory chip market is unlikely before 2020.
The S&P 500 bank sub-sector .SPXBK rose 2.51% as rate-sensitive lenders benefited from U.S. Treasury bond yields easing off their lows.
The so-called FAANG group – which includes Facebook Inc (FB.O), Amazon.com Inc (AMZN.O), Apple (AAPL.O), Netflix Inc (NFLX.O) and Google-parent Alphabet Inc (GOOGL.O) – gained between 0.9% and 2.3%.
General Electric Co (GE.N) jumped 7.4% as Chief Executive Officer Larry Culp bought nearly $2 million worth of shares a day after the stock recorded its biggest one-day percentage fall in 11 years.
Advancing issues outnumbered decliners by a 4.09-to-1 ratio on the NYSE and by a 3.95-to-1 ratio on the Nasdaq.
The S&P index recorded 27 new 52-week highs and seven new lows, while the Nasdaq recorded 28 new highs and 69 new lows.
Reporting by Medha Singh and Arjun Panchadar in Bengaluru; Editing by Anil D’Silva