June 28, 2019 / 2:20 PM / 4 months ago

US STOCKS-Wall St modestly higher with G20 summit underway

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* Trump-Xi meeting at G20 in focus

* Banks rise on clearing Fed’s final stress test

* U.S. consumer spending rises in May; inflation muted

* Apple drops, pressures Dow and Nasdaq

* Indexes up: Dow 0.06%, S&P 0.20%, Nasdaq 0.05% (Updates to open)

By Shreyashi Sanyal

June 28 (Reuters) - U.S. stocks rose on Friday as shares of big banks gained after clearing the Federal Reserve’s stress test, with investors closely tracking the G20 summit where President Donald Trump and his Chinese counterpart, Xi Jinping, could lay the groundwork to resolve a trade dispute that has weighed on global growth.

Trump said he hoped for productive talks with the Chinese president, but said he had not made any promises about a reprieve from escalating tariffs. The two leaders are scheduled to meet on the sidelines of the G20 summit this weekend in Japan.

“The bar is very low for G20 right now. All we need is a framework for a deal,” said Kim Forrest, chief investment officer at Bokeh Capital Partners in Pittsburgh.

“And I think the Street thinks that can happen. I think an agreement to just talk to each other is achievable.”

The uncertainty caused by conflicting reports on a potential trade truce stalled this month’s rally, with the S&P 500 index on pace to post its first weekly loss in June.

Still, the benchmark index is up 6.5% for the month, putting it on track to clock its best six-month performance since March 2012. Global stocks, meanwhile, recorded their best first-half of the year ever.

Lifting Wall Street were gains in financials, up 1.14%, the most among the 11 major S&P sectors.

Banks stocks jumped 2% after the Fed on Thursday approved capital plans of 16 banks, including JPMorgan Chase & Co, Bank of America Corp and Citigroup Inc , in its final stress test hurdle.

At 9:50 a.m. ET, the Dow Jones Industrial Average was up 14.91 points, or 0.06%, at 26,541.49 and the S&P 500 was up 5.88 points, or 0.20%, at 2,930.80.

The Nasdaq Composite was up 4.34 points, or 0.05%, at 7,972.10.

Apple Inc dropped 1%, pressuring the tech-heavy Nasdaq and the blue-chip Dow, after the iPhone maker said Jony Ive, a close creative collaborator with the company’s co-founder Steve Jobs, will leave later this year.

Constellation Brands Inc jumped 4%, the most on the S&P, after the Corona beer maker reported quarterly results above analysts’ estimates.

Giving the Fed ammunition to cut interest rates next month was data that showed consumer spending increased moderately in May and prices rose slightly, pointing to slowing economic growth and benign inflation pressures.

Advancing issues outnumbered decliners by a 2.94-to-1 ratio on the NYSE and by a 2.49-to-1 ratio on the Nasdaq.

The S&P index recorded four new 52-week highs and no new low, while the Nasdaq recorded 37 new highs and nine new lows. (Reporting by Shreyashi Sanyal and Amy Caren Daniel in Bengaluru; Editing by Anil D’Silva and Sriraj Kalluvila)

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