US: S&P 500, Nasdaq end at record highs after US-Vietnam trade deal

[NEW YORK] The S&P 500 and Nasdaq ended at fresh records on Wednesday after President Donald Trump announced a trade deal with Vietnam, offsetting weak hiring data.

The session began in a dreary fashion after payroll firm ADP said the US private sector lost 33,000 jobs in June, adding to worries ahead of Thursday’s critical government jobs data.

But markets greeted Trump’s announcement that he reached a deal with Vietnam.

“Little by little, we are coming to agreements,” said Sam Stovall of CFRA Research. This “should be regarded as positive.”

The broad-based S&P rose 0.5 per cent to 6,227.42, its third all-time high in the last four sessions.

The tech-rich Nasdaq Composite Index gained 0.9 per cent to 20,393.13, also a record, while the Dow Jones Industrial Average was unchanged at 44,484.42.

The strong performance in stocks came in spite of a rise in US Treasury yields that suggests unease in the bond market as Congress weighs Trump’s massive tax and spending package that has been projected to swell US debt.

“It’s driven a wedge between stocks and bonds,” said Jack Ablin of Cresset Capital Management. “Equity markets are applauding the tax cuts… bond markets are concerned about the long-term effects.”

Among individual companies, Tesla rose 4.7 per cent as the company reported a 13.5 per cent drop in second quarter auto sales. However, the figures were not as bad as some experts expected.

Some apparel stocks rose after Trump’s deal with Vietnam meant goods would be subjected to a 20 per cent tariff instead of an even bigger 46 per cent levy threatened by Trump. Ralph Lauren gained 0.9 per cent and Gap and Lululemon Athletica both won 0.5 per cent. AFP