US open: Stocks trade higher after China calls for 'calm' resolution to trade spat
Stocks traded higher at the opening bell on Thursday as China's desire to calmly wrap up its trade war with the US gave investor sentiment a much-needed boost.
As of 1545 BST, the Dow Jones Industrial Average was up 0.99% at 26,293.69, while the S&P 500 was ahead 1.06% at 2,918.53 and the Nasdaq Composite came out the gate 1.39% stronger at 7,965.74.
Following on a late rally during the previous session, the Dow opened 257.69 higher on Thursday after China's commerce ministry stated that it wanted to bring an end to its protracted trade dispute with the US in a "calm" manner.
China also said it was not interested in escalating tensions at the moment, hinting that it may not retaliate with tariffs of its own on Sunday, and that the two sides remained in contact with the aim of continuing negotiations, perhaps in September.
Beijing's comments seemingly did their part to soothe investors even as concerns regarding the possibility of a global recession remained in focus.
However, Oanda's Crag Erlam said: "The unfortunate reality is that these comments are likely more hot air but with everything that's happening at the moment, they do provide rays of hope."
On the data front, the number of Americans filing for unemployment benefits rose as expected last week, according to figures released by the Department of Labor on Thursday.
Initial jobless claims were up 4,000 from the previous week's revised level to 215,000, in line with analysts' expectations. The previous week's level was revised up by 2,000 from 209,000.
In other news, the US economy slowed by only a smidgen more than originally thought during the second quarter, revised data showed, but only thanks to the strongest showing for the American consumer in over half a decade.
According to the Department of Commerce, the annualised rate of growth in gross domestic product slowed from 3.1% in the first three months of 2019 to 2.0%, instead of the 2.1% pace announced in its preliminary estimate.
Commerce also revealed that America's shortfall in trade on goods with the rest of the world narrowed unexpectedly last month.
According to preliminary data, the US trade deficit in goods shrank from $74.2bn for June to £72.3bn in July. Economists had pencilled-in a reading of $74.0bn.
Exports rose at a month-on-month pace of 0.7% to reach $137.3bn while imports declined by 0.4% to $209.7bn.
Wholesale inventories grew at a 0.2% month-on-month clip in July to reach $679.4bn, putting them ahead by 7.1% versus a year ago, while retail inventories were up 0.8% on the month at $665.1bn.
Lastly, fewer Americans signed contracts to buy homes in July, indicating that the housing market had yet to reap the rewards of lower mortgage rates.
The National Association of Realtors' pending home sales index fell 2.5% to 105.6 in July.
In terms of corporate news, Best Buy shares were 9.78% weaker in early trade after posting a second-quarter earnings miss, while Dollar General shares were up 8.79% at the bell after the retailer raised forecasts for the full year.
Dell will post earnings after the close.
Trade bellwethers Boeing and Caterpillar both picked up 1% in early trade, while Micron Technology shares gained 2%.