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* Ten of 11 major S&P 500 sectors trading higher
* China service sector activity rises to 3-mth high
* Activision Blizzard (NASDAQ:ATVI) rises on BMO upgrade
* Tyson Foods falls on cutting FY profit forecast
* Indexes up: Dow 0.57%, S&P 0.58%, Nasdaq 0.72%
(Updates to open)
By Uday Sampath Kumar
Sept 4 (Reuters) - U.S. stocks rose on Wednesday as upbeat
data from China's services sector eased concerns about a global
economic slowdown, while Hong Kong's withdrawal of a
controversial bill supported sentiment.
Activity in China's services sector expanded at the fastest
pace in three months in August, providing a boost to the world's
second-largest economy that has been struggling to reverse a
prolonged slump in its manufacturing sector. Sentiment also got a lift after Hong Kong leader Carrie Lam
withdrew an extradition bill that had triggered months of often
violent protests in the Chinese-ruled city. The three main indexes had come under pressure on Tuesday
after the United States and China imposed new tariffs on each
other's goods and data showed a contraction in U.S. factory
activity in August. "The positive economic news out of China is offsetting the
weak manufacturing data from the U.S. yesterday and diminishes
the fear of an economic downturn," said Shawn Gibson, chief
investment officer at asset management firm Liquid Strategies.
"Global growth and not just U.S. growth is a very important
narrative for investors because a strong Chinese economy is
important to our economy as well," Gibson added.
Markets struggled last month as escalating trade tensions
and the inversion of a key part of the U.S. yield curve, often
seen as a sign of recession, drove investors away from risky
assets and pushed the S&P 500 .SPX to log its worst August in
four years.
Further easing concerns of a slowdown were comments from New
York Federal Reserve President John Williams (NYSE:WMB) who said he is
ready to "act as appropriate" to help the United States avoid an
economic downturn but so far the economy appeared to be in a
good place. Ten of the 11 major S&P sectors were higher, with a 1.05%
rise in technology stocks .SPLRCT providing the biggest boost.
Trade-sensitive chipmakers accounted for a major portion of
those gains, with the Philadelphia Semiconductor index .SOX up
2.18%.
Bank stocks .SPXBK rose 2.18%, bouncing back from a
selloff on Tuesday when the 10-year U.S. Treasury yield
US10YT=RR hit its lowest since July 2016.
UBS slashed its forecasts for global growth and government
bond yields, predicting 10-year U.S. yield, the benchmark for
global borrowing costs, would end the year at just 1%.
Gibson said the nonfarm payrolls report due Friday will be
very critical, because any sort of weakness in data could push
Treasury yields even lower and signal that bond investors are
concerned about an upcoming recession.
At 10:17 a.m. ET the Dow Jones Industrial Average .DJI was
up 148.56 points, or 0.57%, at 26,266.58, the S&P 500 .SPX was
up 16.88 points, or 0.58%, at 2,923.15 and the Nasdaq Composite
.IXIC was up 57.02 points, or 0.72%, at 7,931.18.
Tyson Foods Inc (NYSE:TSN) TSN.N shares fell 5.2% to the bottom of
the S&P 500 after the United States' biggest meat processor cut
its 2019 earnings forecast.
PVH Corp (NYSE:PVH) PVH.N jumped 3% as the Calvin Klein-owner's chief
executive officer, Emanuel Chirico, on Tuesday announced plans
to buy company shares. Data showed the U.S. trade deficit narrowed slightly in July
as exports rebounded, but the gap with China surged to a
six-month high. Advancing issues outnumbered decliners by a 4.17-to-1 ratio
on the NYSE and by a 2.47-to-1 ratio on the Nasdaq.
The S&P index recorded 52 new 52-week highs and one new low,
while the Nasdaq recorded 44 new highs and 38 new lows.